Chameleons Of All Types
By Steve Smith -- TWICE, 1/9/2003
LAS VEGAS — Well, here we are again, starting the new year attending the industry's largest trade show, in a city of glitter and fantasy that is a chameleon. If you squint a little bit while you are in Vegas you might think you are actually in Venice, Paris, New York, Egypt, or other places too numerous to mention.
The size of this issue of TWICE, and the amount of new product introductions we are covering here and in our TWICE CES Daily, which is published here for show attendees, only illustrates the strength of the consumer electronics industry even during difficult economic times.
The vitality of the CE business has always been strong, even more so in the past few years as digital products either replace analog varieties or create entirely new categories. The Vegas setting for International CES is more appropriate than ever. Digital products, the subsequent change in distribution and the changing consumer base are forcing manufacturers to become chameleons, just like the city they are visiting this week.
While the changes manufacturers are undergoing are in many cases more subtle than wholesale, there are plenty of noticeable alternations. TWICE editors were fortunate enough to visit with the top executives of three manufacturers just prior to CES — Panasonic, Pioneer and Philips — which resulted in stories that appear in this issue. The common thread in all three stories is that each one is changing their technology, distribution and brand image to adapt to the new marketplace.
For Panasonic (see p. 7), the issue is product, brand perception and distribution. The company has taken a leadership role with HDTV, SD card-based products and DVD-RAM recording decks and altered its distribution to have more specialty retailers to sell these upscale products. Panasonic is also altering its brand image with its "Ideas For Life" campaign.
For Philips the challenge is ongoing, as president Larry Blanford explains in this issue (see p. 7). The upscale product introductions which began last year, and earlier, mixed with a change in retail distribution to more specialty retailers continues. With an increase in ad spending, momentum has begun, which should mean that the North American division will make a profit in CE right on plan, by 2004, Blanford said.
Pioneer's investments in plasma TV and DVD-R/-RW are no longer future products, but represent significant volume right now, according to Kaneo Ito, president of Pioneer Japan. Ito said that by the end of fiscal year 2003, March 31, 42 percent of its worldwide sales would be generated by "new business' categories such as those two.
The story of these three companies is just one more illustration of how the only thing permanent in life, and the consumer electronics business, is change. If you are here in Vegas with us, have a great show, and whether you are here or back home, have a Happy, healthy and profitable New Year.
We would like to thank our friends over at NPD Techworld, and Tom Edwards in particular, for again generously providing us with their market share reports for a wide variety of CE categories (see p. 21). The reports, which show market share winners for the period January to October 2002 vs. 2001 provide a quick overview as to how certain brands are faring in the marketplace.
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