By Steve Smith on May 4 2009 - 10:34am


‘End Of The Beginning’

Earnings season is upon us and the overall trend of the numbers should not be surprising to anyone, given the economy.

Losses and negative numbers are all over the place, but mixed in with the red ink, layoffs and consolidations are some positive signs that may not all be spin control on the part of these publicly held companies.

During times like these you should take good news where you can find it.

For instance, if you check this issue of TWICE you will see a plethora of financial reports, with companies like Apple and AT&T benefitting from the popularity of iPhone; Amazon and RadioShack showing good performances; and Samsung — while reporting a lower net – saying that CE and cellphone sales have been good. LG and Sharp both posted losses but said that they are hopeful of a turnaround as the year progresses.

Even in the major appliance business, hit harder than anyone in the industry can ever remember, top execs at both GE and Electrolux said the worst may be over.

All of these financial reports seem to match up with antidotes and comments from retailers over the past month or two saying that CE and major appliance sales have stabilized somewhat. Here’s a great phrase we’ve heard more than once: "Things aren’t as bad as you might think."

Sony’s Stan Glasgow and retailers attending the recent CEA Washington Forum told TWICE that there are positive signs in the marketplace. (See stories on p. 1 and 12.)

Last Thursday, The New York Times wrote about a Commerce Department report indicating that the U.S. economy slid at the fastest rate since the late 1950s during the wake of a severe collapse in home construction. But the story also reported the Commerce Department said consumer spending was up in the first quarter by 2.2 percent led by appliances, computers, cars and other durable goods.

All this being said, this bit of good news is little comfort to those who lost their jobs in the past quarter, had their salaries cut or lost a bundle in their savings and retirement accounts.

And even when the economy stabilizes and begins a growth pattern again, there will be more challenges than ever in the CE and major appliance industries.

In majaps, the days of an expanding share of upscale product sales may remain a memory. After the economy recovers consumers may just go back to the replacement vs. fashion mode. We’ll see.

As for consumer electronics, there doesn’t seem to be much in the way of new groundbreaking technologies waiting to be unleashed. I say that in comparison with a decade that has given us HDTV, Blu-ray, TiVo, iPod, iPhone, satellite radio, HD Radio and plenty more new products.

And how the Swine Flu plays out and how it may affect the economy is anyone’s guess.

So I’m not ready yet to crack open a bottle of expensive champagne just yet. But as British Prime Minister Winston Churchill once said in 1942 when the Allies finally had a victory or two against the Axis powers in World War II, "Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning."

Let’s hope so.

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