January 6, 2010

Consumer Electronics Makers Hope For 2010 Turnaround

After experiencing a rare drop in sales last year, consumer electronics makers are hoping smartphones, e-readers, small laptop computers and other devices will help turn things around in 2010.

The industry saw its revenue decline by two percent in 2009 to $681 billion, after posting a 14 percent growth in 2008.

However, a 2010 forecast released by the Consumer Electronics Association (CEA) ahead of this year's Consumer Electronics Show (CES) in Las Vegas gave little reason for optimism that sales would significantly improve in 2010.

"The global economic recession that has crept its way around the globe really impacted revenues in 2009," said CEA director of industry analysis Steve Koenig.

"In 2010, as the world starts to recover from this global recession, we're anticipating flat overall revenues, at least at this stage," said Koenig as he addressed reporters gathered for the 4-day CES, which begins Thursday at the Las Vegas Convention Center.

Some 110,000 visitors are expected at the show, which will feature more than 2,500 exhibitors.

Although the outlook is promising for China, India and South America, "a lot of this growth we're seeing in emerging markets is not enough to offset the declines in the developed countries," he said.

CEA's chief economist and research director Shawn DuBravac said he expected netbooks to be among the hottest devices at the show.

"We're going to see a plethora of offerings," the AFP quoted him as saying.

Indeed, CEA predicted that 68 percent of overall global personal computer sales this year will consist of laptops, including a significant number of netbooks.

"Consumers really want all the features of a notebook with the price of a netbook," said DuBravac.

"They're using it to browse the Internet, they're using it to email, they're shopping online."

"The US netbook market doubled in '09 and we expect it to double again in 2010," he said.

Sales of mobile phones are also expected grow, with the CEA forecasting worldwide sales of 1.169 billion devices this year "“ a two percent increase over last year and a slight improvement over the total of two years ago.

However, iPhone maker Apple and mobile newcomer Google Inc. will not be represented at this year's CES.

Apple has traditionally spurned the show, while Google unveiled its first branded smartphone, called the "Nexus One," at its corporate headquarters on Tuesday.

Google's entry into the mobile phone arena illustrates what DuBravac called a growing trend of "cross pollination" among technology firms.

"You're seeing traditional GPS manufacturers moving into mobile phones, you're seeing mobile phone manufactures moving into netbook categories," he said.

The line between PCs and the televisions is also becoming blurred as companies harness the power of Web-enabled TVs to offer new products and services.

Internet communications firm Skype recently announced that new high-definition TVs from Panasonic and LG would enable the company's free voice and video services.

In the budding e-reader category, Amazon is facing headwinds from growing competition to its popular Kindle e-reader, with a number of rivals set to display their latest wares during CES.

Flat-panel 3-D TVs, a staple of the show, will also be on exhibit as manufacturers continue their campaign to bring 3-D into the home. The initiative has been hindered so far by a lack of content and the need for customers to wear specialized glasses.

But there are signs that may be changing. On Tuesday, sports broadcaster ESPN said it would show some World Cup soccer matches live from South Africa in 3-D.  Meanwhile, Sony said it was partnering with Discovery and IMAX to launch a 3-D TV network in the United States.


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