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In a dramatic sign of how consumer tastes have shifted to new, more exciting wireless products, global factory revenue for smartphones and tablets this year will rise to become larger than revenue for the entire consumer electronics market—the first time this has ever occurred. The massive shift to new mobile devices, according to a new IHS report, is largely due to the debut of Apple's iPhone and iPad.

According to IHS's report, worldwide original equipment manufacturer (OEM) factory revenue for media and PC tablets and for 3G/4G cellphones—a category dominated by smartphones—will amount to $354.3 billion in 2013. That will represent 3 percent more than the $344.4 billion for OEM factory revenue for the CE market, a broad category that includes hundreds of product types, including televisions, audio equipment, cameras and camcorders, video game consoles and home appliances.


The massive CE market has historically dwarfed the tablet and smartphone segment and in fact just last year, the broader CE sector was larger then the smartphone/tablet sectore by moren than 30 percent. In just one year, the surge in smartphone/tablet sales has overtaken the broader CE sector, which is an amazing shift.


According to IHS, the surge began in 2007, the year that smartphone shipments dramatically rose due to Apple Inc.'s introduction of the first iPhone. The figure also presents the boom in revenue during 2010, the year that Apple kicked off the media tablet market with the introduction of the initial model of the iPad.


Apple to Have Huge Backlog of iPad Mini (Retina) Orders Going into 2013


In another IHS report published late yesterday they note that supplies of Apple's second-generation iPad mini are expected to fall well short of demand in the fourth quarter due to limited production of the tablet's new Retina Display.


Based on current supply data, shipments of the new iPad mini with Retina Display will fall below 4 million units and potentially amount to less than 3 million units in the fourth quarter. This would represent as little as one-third of the 8.9 million unit volume of the first-generation iPad mini shipments during the final three months of 2012, the first quarter when that product was sold.


Actual demand for the original mini was well above the 8.9 million figure, leaving Apple with a huge backlog of orders for the mini at the start of 2013. IHS allegedes that with demand for the new mini in the fourth quarter expected to equal or exceed the nearly 9 million units of its predecessor model, supply and demand will be severely out of balance. Time will tell if IHS gets this one right.


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