The CE accessories business is expected to benefit from battery/charger-supported product portability as well as the advanced technologies in nickel metal-hydride (NiMH) rechargeables that should fire up sales of high-drain digital devices. Battery companies Lenmar and Sanyo Energy, all charged up about the many positive possibilities tied to these trends, are looking to grow their businesses in 2006.
Looking more at the difficulties that lie ahead in the coming 12 months, Marty Goldberg, CEO at Camarillo, Calif.-based Lenmar Enterprises, said, “The overall U.S. economy is in a tenuous position for 2006. It is an election year with inflation fears, interest rates are due to rise, American troops continue to die in Iraq and the U.S. deficit is getting bigger.”
In the United Kingdom and Europe, consumer consumption has already subsided, noted Goldberg, but the consumer confidence level in the U.S. was low at the end of 2005, due to mistrust of government and uncertainties of the economy. “If housing prices tumble or unemployment figures increase, 2006 could prove to be a very difficult year for consumer electronics,” he said.
However, Goldberg does not foresee only doom and gloom. “Consumers will still buy. However, they may be more discriminating on what they buy and who they buy from.
“The industry should also benefit from the continued trend of portability as a way of life,” Goldberg noted, citing CE products such as cellphones, digital cameras, iPods and laptops. These are considered more as a necessity as opposed to a luxury item. Plus every portable product needs a portable energy source, he said.
During periods of 2006, when hardware sales get tougher and more competitively priced, Goldberg said it is even more imperative that retailers utilize batteries and accessories to help drive profit dollars to their bottom-line equation.
“In light of the current economic climate and political landscape, the proliferation of portable devices will continue at a brisk pace in 2006, as will demand for related accessories,” said Paul Perryman, national sales manager at San Diego-headquartered Sanyo Energy. “High-drain digital devices are of particular importance to the growth of the battery category.”
Due to pricing pressures, portable device manufacturers' products often include inexpensive alkaline batteries, which do not optimize device performance, thus creating trade-up opportunities to nickel metal-hydride (NiMH) rechargeable batteries, said Perryman. “NiMH will be the growth engine for the battery category over the next few years.”
To accelerate this growth and widen usage applications, Sanyo has launched a new, low self-discharge NiMH battery, which comes fully charged at time of purchase, allowing the consumer to use it immediately. Furthermore, the battery will retain 80 percent of capacity after one year of storage and 70 percent after two year's storage, thus overcoming the limitations of rechargeable batteries. “Consumers will begin to rethink their battery purchase decisions as this economical alternative to alkaline emerges,” he said.
In wireless communications, the highly dynamic cellular accessories market will continue to be a growth opportunity in 2006, continued Perryman. “Those who can simplify the consumer selection process, offer distinctive product features and excel at speed-to-shelf will be rewarded with above average sales growth. With many Bluetooth enabled phones hitting the market in the last six months, coupled with more hands-free legislation laws being passed, Bluetooth headsets will reach critical mass in 2006, fueling double-digit growth in the overall cellular accessory category,” he noted.