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Recession, what recession? Strong consumer electronics sales defy collapsing GDP

by David Mercer | Aug 14, 2020

Beware those pandemic GDP data: any relationship with sales results may be coincidental. In an extraordinary series of results, our latest forecasts have reported a number of strong growth performances from key consumer electronics categories such as notebooks, tablets and smart speakers.

  • Global notebook PC shipments rose 44% in Q2 compared to Q1 to reach a new quarterly record
  • Global tablet sales rose 36% in the same period
  • Global smart speaker sales rose 6% in Q2 v Q1

The lessons?

  1. This is no ordinary economic recession and it is dangerous if not impossible to model demand for most things, and particularly technology and communications services, based on dramatic swings in the economy’s performance.
  2. Government rescue packages are skewing consumer behaviour in unforeseeable ways. The ups and downs of GDP bear almost no resemblance to the money in people’s pockets.

The second half of 2020 will be a bumpy ride for major economies, no doubt about it. As furloughs, subsidies and rebates come to an end, businesses will begin to take the necessary survival measures, and that will hit hard in some places. Some consumers will suffer, especially those made unemployed, but planners should take care to avoid using simplistic cause-and-effect economic assumptions as inputs to demand models.

I reported in the early days of the pandemic, “sales are going up as well as down”, while also predicting “extreme volatility”. Those predictions haven’t changed: these are very strange times and keeping a close eye on the real economy (consumer behaviour) is more vital than ever.

David Mercer
Previous Post: Tablet Market Beats Expectations amid COVID-19 Impacts on Supply Chain and Consumer Demand

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