Overview of the Consumer Electronics Industry
The consumer electronics industry generates over one trillion dollars worth of sales globally per year. It consists of a wide variety of retail segments (such as audiovisual equipment, home appliances, white goods, mobile phones and smart phones, digital communications and MP3 personal audio). Over half the consumer electronics industry is governed by the world's largest dozen or so manufacturers. These conglomerates mass-produce millions of everyday products each year, designed for home use, entertainment and communications. Consumers homes are becoming more and more Internet ready as the take-up of broadband and efficient energy-saving devices rises. Unit sales of electronic home appliances have advanced for decades, due to low-cost labour and modern manufacturing facilities (based mainly in Japan, China and Malaysia).
The industry is a highly dynamic and price sensitive section of the World economy because it relies heavily upon the cost of raw materials ( such as copper) in the manufacturing of electronic products. With slim margins, commodity price inflation hurts the industry. Prices are also highly unpredictable due to consumer trends in demand for popular gizmos ( such as iPods and GPS devices). Generally commoditised computerised hardware prices tend to fall as technological advancements in semi-conductor production methods rises. In addition, prices remain competitive due to strong research and development investment into product design and innovation. Prices in regional markets are greatly related to disposable income levels.
The economic downturn has strongly impact profits of businesses within the consumer electronics industry. The downturn has sparked tremendous growth of second hand and unwanted consumer electronics on online auction websites, charity shops and pawnbrokers. The depreciation of consumer goods is high, and product life cycles are getting shorter. Thus, the notion of a quality product that 'lasts a lifetime' is hardly ever applied to market and advertise consumer electronics
The move from desktop computing to handheld tablets and smart phones is also transforming the nature of the consumer electronics industry. Many product technologies are converging because smart phones and tablets continue to deliver duplicated functionality. These functions include personal audio apps, gaming, photography, satellite and location applications and digital communications. Indeed many consumer products are Internet connected by utilising wide area connectivity ( such as Wi-Fi hotspots and Bluetooth). This connectivity enables users to download software upgrades, subscribe to entertainment services and utilise geospatial services.
For many office-based businesses, the use of specialist electronics engineers is vital when products break. The computer services industry has benefited greatly from the increased consumption of goods by companies. For example, many small firms use third party technicians to support their local area network, maintain their IP phone system and repair handheld devices.
The growth in sales of consumer electronic appliances online has threatened the existence of many traditional high street consumer electronic shops. In order to survive, many high street retailers have had to abandon the provision of a broad range of low-cost items, and instead specialise on larger ticket items (such as cookers and dishwashers). In addition, many retail businesses offer specialist advice, warranties and repair services. Similarly, as prices have become more competitive many larger high-street electronics chains have close their doors in the face of competition from supermarkets and the Internet. The average product life-cycle has shortened dramatically as consumers throw away 'old' gadgets to replace them with the latest 'must have' technology. Internet ready flat screen televisions are one segment of the industry in which new movie 'on-demand' services has changed the nature of consumer buying habits. Another example is the growth in the use of smart phones being used as makeshift cameras. This has greatly impacted sales of new digital cameras elsewhere.
Consumers, importers, wholesalers and retail outlets are all bound by new environmental legislation. With so much demand, the proper recycling of raw materials, household appliances, and other consumer electronics products is becoming a political issue. Consequently the recycling industry has benefited from increased demand by providing specialist recycling services to ensure unwanted consumer appliances (such as old fridges, microwaves and cookers) are disposed of safely. Similarly, consumers are becoming more mindful of the impact of electronics on the environment. Rather than through to through an old kettle or toaster away, many items end up on eBay or in the local recycling centre. Many online business directories will list local recycling firms, electronics shops, support engineers and many other businesses supporting and supplying consumers and other firms.