Consumer Electronics – The European Picture

GfK's Global Director for Consumer Electronics Juergen Boyny explains what we can expect from the European market this year

What is your verdict on 2009?
The development of the European Consumer Electronic Market in 2009 has unquestionably been a negative one, with the market down -10% in Euro terms compared to 2008. The reasons behind this development can be explained as a mosaic of different pieces.

On the one hand there is of course the financial crisis. In several European countries unemployment has drastically increased (Spain for example is currently experiencing an unemployment rate of 20%).

But it is not only the financial crisis. We have to keep in mind that the European Soccer Championship in 2008 helped to drive the TV market considerably. We had none of these external events in 2009.

However it is not only consumer behaviour which has turned the market to a negative tendency. There remains high consumer demand for CE products.  TV-Display enjoyed positive double digit development in unit terms. However, price erosion for Flat TV, of around -25% meant that even this extremely popular product category recorded a negative development in terms of revenue.  The unit based development of Flat TV alone cannot turn the market into a positive direction.

How do you feel the Christmas period will fare – and will this be indicative of 2010?

Again, Christmas business largely depends on the economic situation of the consumer. We have to be aware that many government support programs, which have supported private purchasing power during 2009 will stop in 2010. We are also fearful that the unemployment rate in Europe is yet to reach its final peak. A positive turnaround in the economic situation, expected in the first half of 2010 will reach consumers budgets during the second half of the year at the very earliest.

Regarding global warming and the recent Copenhagen summit – is 2010 destined to ‘go green’?

“Green CE” will be a hot topic in 2010.  The European parliament will finalise a new energy label, which must also be used also for CE-products, especially for TV-sets. With new technologies, e.g. LED-display, on-mode power consumption but also standby power can help significantly reduce consumption.

Also the press and all media will pick up on this theme, so we can expect key discussions from both consumers and retailers on the subject.

After music (mp3s), picture (HDTV) what is the next big technology for the CE markets?

3-dimensional TV is now presented everywhere, including Las Vegas. I think 3D is one of the basic desires for consumers regarding entertainment. This step to the future can be compared with the advent of Colour-TV 40 years ago and Flat-TV just ten years ago.

How do you feel CE sales will evolve in 2010?

As I have mentioned, 2010 will be not be easy but it will be manageable.

The Soccer World Cup in South Africa should provide a positive impact. We see no reason for further price reduction in TV, except for the tough competition of course. In the first month of 2010 the seeds for the second half of 2010 have to be planted.