Summary
With few exceptions, the value per dollar consumer electronics offer today is truly extraordinary, helping keep demand relatively healthy, even in a (very) down cycle.
But there is much, much more to come.
Analysis
Consumer Electronics provide so much to so many: entertainment, communication, information, access, companionship, connection with friends and family, social currency and status, just to name a few. Add to that devices that are becoming smaller, sleeker, faster, friendlier and more fun, with prices coming down weekly, and it creates fuel for demand and replacement purchases. Right now in North America though, the industry is in a lull from a dearth of new product, in addition to the affects of the recession.
Flat panel TV adoption has hit the mass and is moving toward the late adopter market curve, which translates into further declining ASPs and profit margins, and Walmart's sweet spot. Long the market share leader in tube TVs, predictions are that Walmart will soon earn that status in flat panel TV.
For early adopters the most interesting products right now are mobile devices that allow more freedom and flexibility - like smart phones, netbooks, and ebook readers.
From a supplier standpoint, in Consumer Electronics, Samsung continues to be very aggressive, with long established manufacturers like Sony still feeling generally stuck in their old ways, and old cost structures. PC manufacturers, heavily reliant on their ODM partners to deliver compelling products and price points, are benefitting from notebook and netbook demand while considering their place in new mobile computing and communication devices
Looking forward, unlike in the 1970s, 80s and 90s, in today's digital, global world you no longer need to be a big, and likely Japanese, brand to disrupt, shape and even lead the consumer electronics of tomorrow. The Pure Digital Flip camcorder, Asus's Eee Netbooks and Vizio's meteoric rise in flat panel TV all helped redefine the status quo in their categories.
The real upside though is that far too many of the Consumer Electronics and PC products on the market today are still more user-unfriendly, frustrating and difficult to use than they should be - when that changes, sales in this category will really take off.
Cathy Stauffer consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
