During the last decade, the growth and innovation achieved by the consumer electronics industry has changed the world. Competitive pricing has made CE products increasingly affordable. Today, consumers have a greater ability than ever before to communicate, obtain knowledge and access all forms of entertainment wherever and whenever they choose.
As quickly as new technologies evolve, consumers are upgrading to digital or purchasing new products with more features, driving our industry to greater and greater heights. The Consumer Electronics Association (CEA) forecasts that total sales of consumer electronics products will surpass $125 billion in 2005, marking a strong 11 percent increase over 2004 sales.
But this golden era has a gilded side — increased competition and rapid innovation drive down prices as never before. In many categories, consumer electronics have become a commodity. When a new DVD player costs less than $40, it is often more cost efficient for consumers to buy a new deck than repair an older product. Moreover, the introduction of so many fantastic new digital technologies makes existing analog products obsolete and disposable.
Based on projected sales and obsolescence rates, an estimated 3 billion PCs, TVs, cellphones and other consumer electronic products will be scrapped during the rest of this decade — an average of about 400 million units a year. With three federal bills set for consideration, the formation of the Congressional E-waste Working Group this past spring, and upcoming e-waste hearings on Capitol Hill, the issue of e-waste has entered the arena of national public debate.
Additionally, a renewed focus on federal energy legislation this year has been accompanied by an increase in state-based energy legislation, much of it emphasizing energy efficiency. Several of these state energy efficiency bills have proposed mandatory government standards that artificially limit the energy consumption of several types of electronic products, which in turn threatens consumer choice and product innovation. Fortunately, all such legislative proposals to date have been defeated.
However, a different path was taken by California, which several months ago took an administrative action to impose first-ever mandatory standards for the energy consumption of consumer audio and video products. CEA has called on Gov. Arnold Schwarzenegger to rescind these regulations, which we consider anti-digital and anti-consumer.
As our industry faces mounting regulatory and legislative pressure, we must assume an increasingly active role in environmentally related public policy decision making. If not, we will soon face a patchwork of mandates that impose costs and other burdens on product design, manufacturing and marketing.
Last year, CEA's executive board established the Environmental Policy Committee (EPC). Early this year, the committee began efforts to execute an aggressive agenda to shape feasible, flexible, environmental policy solutions.
In May, CEA's executive board passed a resolution establishing the association's policy on end-of-life product recycling. Our official policy position calls for:
- A national solution for end-of-life recycling that provides certainty and consistency for manufacturers, retailers, consumers and government officials;
- The creation of an environmentally responsible and economically workable national solution that prevents a patchwork of individual state approaches;
- Market-driven environmental design initiatives, such as federal and state programs on purchasing of environmentally preferable display devices;
- Federal and state initiatives that foster the development of environmentally effective recycling systems, such as federal tax incentives and legislation requiring federal government agencies to recycle electronics products.
Environmental issues and concerns are a priority for the CE industry. I urge you to get involved with CEA's Environmental Policy Committee as it addresses environmental challenges to our industry at all levels of government and identifies solutions which protect the interests of consumers, retailers and consumer electronics manufacturers.