State Of CE Is Good At Midyear

A few years ago we came up with the idea for this special issue, “State of the Industry Report,” where TWICE editors review what has gone on during the first half and what may happen during the second.

We came up with the idea to provide the type of industry overview the departed Summer Consumer Electronics Show in Chicago used to provide up until the mid-1990s. For those of you who joined the industry after Summer CES ended, it was held around the first week of June. The show was close enough to midyear for exhibitors to introduce products in Chicago that weren't ready in time for the Vegas event. And it was at the midpoint of the year, time enough for everyone to have an opinion at to what went on in the first half and predictions about the second.

Funny thing is Summer CES became obsolete because exhibitors said the cost of another major trade show in the middle of the year didn't make sense anymore. Maybe it's because I've been reading plenty of back issues of TWICE for our 20th anniversary issue (to be published on Aug. 28), but I think old habits die hard. It seems as if Summer CES was held all over the place during the entire month of June.

Take a close look at this issue and our June 19 edition. There were major announcements and press conferences galore by Audiovox, JVC, Panasonic, Philips, Pioneer, Samsung, Sharp and Sony; some big news from Best Buy, Circuit City, RadioShack, Tweeter and Wal-Mart; and plenty more.

Of course, at the old Summer CES there was time for high-level networking of top execs and industry panel discussions. Producer of International CES, the Consumer Electronics Association, came up with an idea to get top industry leaders to network at midyear. The CEA CEO Summit was born, but the Summit is not a trade show; it takes place in a top resort and is designed for an open exchange of ideas.

The CEO Summit has been an unqualified success and celebrated its 10th anniversary this year. In June it went back to where the first one was held, Bermuda. While there was plenty of golf, swimming, shopping and overall enjoyment of the flora and fauna of that wonderful island, there was also plenty of discussions about the industry. The one-on-one talk between CEA's Gary Shapiro and Best Buy's Brad Anderson was the major highlight, but it was indicative of all the large and small discussions on industry matters that took place in Bermuda.

What TWICE heard there and from the entire industry during the past month is that CE continued to produce healthy sales growth during the first half, led by flat-panel TVs, iPod and MP3 players, video games and others.

But there are challenges to deal with. The first is within the industry, the HD DVD/Blu-ray battle. More pressing is the general economy, which is featuring higher energy costs and higher interest rates. In major appliances, retailers are bracing for higher prices due to increased costs for raw materials like steel. Some have said the same will affect prices of any CE products with a lot of copper, such as A/V cables.

What we know now is that consumers are still enthralled with a wide-variety of CE products and should continue to be for the foreseeable future. How the general economy may curb sales growth and possibly induce aggressive holiday promotions bears watching.