It's getting to that time of the year when consumers dash around shopping centers and online outlets, pull out the credit cards, and buy up nifty gadgets for loved ones on their holiday-gift list. For electronics companies, the next four to six weeks brings with it some nail-biting anticipation.
This year, like the recent few, there's a gray cloud over consumer spending projections in Europe. Concerns about the debt crisis, new austerity proposals coming on the heels of government turnovers in Greece, Italy, and Spain, and a mixed regional unemployment picture may cause consumers to pause before whipping out their wallets. That said, it's tough to resist the urge to snap up a smartphone, tablet, video game console, or similar devices, and pent-up demand may convert even the most hesitant buyers.
Some reports point to a slowdown in holiday spending as countries in the eurozone seem to be sliding back into a recession. Citing data from the European Union statistics office, the AP reported that the local economy "barely grew in the July-September quarter," making it "the second straight quarter of paltry growth." There's little hope for growth in the coming weeks as consumers and government are expected to spend less, according to the report.
Not to rub salt in the wound, but if there's any truth in a view credited to European Central Bank president Mario Draghi by the Mail & Guardian online we'd all be wise to brace ourselves for even deeper cuts in private and public sector spending: "Europe's politicians, not its central bankers, must solve the crisis through the implementation of policy reforms and austerity measures." This, in turn, will undoubtedly influence how end-customers view their personal job security and plan their household budgets for the coming months.
Consumer confidence reports for the EU are due out this week, and they may not look pretty either. Eurozone consumer sentiment is expected to slip to -21 from -19.9 in October; and in the UK, there's already bad news on the table as the monthly Nationwide Consumer Confidence Index fell for the fifth straight month in October to a new low point.
Even if the signs seem to point to weak holiday splurging, I'm betting companies like Samsung Electronics Co. Ltd. (Korea: SEC) are hoping for the best. Samsung, which has been embroiled in a patent lawsuit with Apple Inc. (Nasdaq: AAPL) over similarities in their tablet offerings, announced last week that it would release a modified version of its Galaxy Tab device in Germany this week. The news comes two months after a court barred the company from selling the tablet computer in Europe's biggest economy and just in time for the holiday shopping season. (See: Can the EU End the Apple-Samsung Patent War?)
I'm certain, too, many are hoping that the trade winds shift and some of the good retail tidings expected in the US blow towards Europe. Besides preliminary reports showing that US consumer spending has improved slightly, the Consumer Electronics Association's Annual CE Holiday Purchase Patterns Study shows that overall spending this holiday will increase as well. According to the organization, consumer electronics "will account for one-third of all holiday gift spending. Consumers plan to spend on average $246 on electronics gifts, an increase of six percent from last year and the highest level since CEA began tracking holiday spending." The top items on the wish list aren't unusual: tablets, laptops, TVs, e-readers, and video game consoles.
I guess we'll know in a few weeks whether it turned out to be a bright deck-the-halls selling season or if consumers adopted a Bah! Humbug! attitude. Retailers and the electronics supply chain are waiting with bated breath.
Also heard this AM that purchasing on credit vs. debit was higher than it has been in previous couple of years, suggesting a change in buyers attitiude. Sometimes I think it is dangerous to ascribe too much to the numbers, but perhaps that conclusion is correct.
True, numbers really look impressive infact some analysts are calling it a record year. Analysts cited a number of reasons for this jump, including extended store hours, good weather, increased online shopping and pent-up demand.
@ Barbara, the discounts may hurt the manufacturers profit margins, but at least they got rid of old inventories that may have otherwise continued to stay in the warehouses at added cost and tying down capital.
BGR reports that online balck friday sales grew from 24.3% over 2010 and total black friday spending rose 39.3% over last year sales. Mobile sales increased to 9.8 percent from 3.2 percent last year. The numbers only is the valid proof to say holiday spending went on high....
From what I hear, Black Friday in the US went pretty well. However, prices were heavily discounted, so for consumers, it was great, but manufacturers may have problems reaching the level of profitbaility they expect.
Ashish, I couldn't agree more. For one thing, as a parent I don't want my child's sense of value to be tied to what he/she owns. Confidence, assurance, and worth must come from inside.
Quick update - No surprise what people are interested in this holiday season at least in the mall and department stores in Barcelona: tablets. Had to stop in for something else Saturday late afternoon, and crowds of people were ohhing and ahhing over a half dozen tablets on display. iPads, of course, seemed to get the most attention. There also seemed to be some interest in e-readers, and people are always lingering around the camera section. Wasn't close to an iPhone mobile operator, so no word on that.
@ Jaden, well said! I am of the opinion that this economy will change the way we consume products for good. Current generation came in at the time of prosperity and had to do very little to get a lot. Now its gut check time, and the free stuffs or subsidized things are long gone. We will henceforth be guided by needs not wants, especially if this economic gloom tarries a little longer!
A new report shows that most of the worrisome issues that the supply chain industry has been dealing with for years are not new, but there are some new concerns that need answers. Here’s a look at what keeps supply chain professionals up at night.
When it comes to shipping supplies from China to Europe, trains might be the most cost-effective way companies have available to them. DHL is looking to jump on that bandwagon.
For many dealing with the enormous task of tracking,
reporting, and resolving issues associated with
potential counterfeit parts, there is a collective
hope that 2013 will bring clearer guidance on what
needs to be done by whom and when.
A necessary foundation for moving efficiently at real-time speed, supply chain analytics is still very much at the beginning stages of development at many companies.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Archived Dialogues
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Euro-Crisis: What It Means for High-Tech Firms Join EBN Editor in Chief Bolaji Ojo and Contributing Editor Jennifer Baljko on Thursday, July 12, at 10:00 a.m. EDT for a Live Chat on high-tech and Europe's economic difficulties.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
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