Uncertainty still hangs over Europe, where politicians struggle to wring out near-term fixes for ongoing economic woes. However, consumers in some pockets of Europe recently shrugged off the malaise (at least for a little while) and pulled out their wallets.
Recently released retail sales reports from around Europe showed a general unexpected uptick in May. According to reports from Forbes and Bloomberg, gains in France, Ireland, Portugal, Sweden, and Switzerland from April helped offset decreasing demand in Germany and Spain. (Italy had not posted its May numbers when the reports came out, but it did have a down month in April.)
Coming into June, the Samsung Galaxy S3 phone topped the "hot" list and had mobile operators excited. According to Forbes, sales have been "remarkably strong," and the phone could have a blockbuster run during the summer, because of uncertainty about when Apple Inc. (Nasdaq: AAPL) will unveil its new iPhone.
But Samsung Electronics Co. Ltd. (Korea: SEC) took a more cautious view of the European market. Even though Galaxy smartphone sales fueled a record quarterly profit of $5.9 billion, the South Korean technology company says it is worried about how Europe's debt crisis will impact television and home appliance sales.
It's hard to say what tipped consumer spending in some places and not others, and the reports I read online didn't provide much insight. These numbers -- and broader consumer sentiment -- fluctuate frequently and often include some amount of seasonality. Nevertheless, given the overall depressing climate in Europe, they were welcome news.
Despite the May retail sales figures, which actually fell 1.7 percent from a year earlier, the economic outlook is grim -- or, at least as most people here are getting used to hearing, not much different from what it has been the last few years. Economists forecast unchanged sales, and Bloomberg reported that "Europe's economy probably failed to grow in the second quarter as budget cuts eroded consumer spending just as companies stepped up job cuts and global demand faltered." Then there's the issue of unemployment, which is a constant drag on the economy and hit a record high in the euro zone in May.
There was some euphoria in the stock market after Europe's 19th crisis conference in Brussels last week, which, according to the Economist offers "guarded optimism" for regional improvements. Nevertheless, it's questionable if political leaders have gone far enough with reform efforts. For instance, International Monetary Fund chief Christine Lagarde said again this week that even though she applauds the steps taken so far, more must be done to solve the euro zone crisis.
EBN will host a live Webchat next week on the economic situation in Europe and its impact on high-tech companies, many of which will be reporting second-quarter numbers in the coming weeks. Click here to register.
Tirlapur, now also there are lots of low cost tablets in markets for pricing range of less than 100 Euros, but nothing from standard companies. So if something from standard companies like Google, Amazon etc, it can have a greater momentum.
the Samsung SII banned from several European markets?
@Mr. Roques, Recently US court lifted the ban on Samsung Galaxy 7 so am sure Smasung is targetting Europe next. Samsung will do some updates to its existing models so that it can re-enter European market.
But I don't think that may be the case for atleast next 2-3 quarters, due to the launch of low cost Google Nexus 7, Amazon Kindle, MS Surface etc.
@Jacob, very true. There are so many new tablets being launched, I think the end user is confused. Infact I am planning to buy one tablet myself but not sure which one to buy, so its better to wait for sometime, read the reviews and then make the purchase decision.
Jacob - I think you're probably right abt the Galaxy's short-term leadership position in Europe. It's been the case for mobile makers for some time now and the Android-Apple-Amazon competition is not something to take lightly.
Anna - I hear you. It's amazing to me how politicians around EU seem to insist that the problems are rooted in saving the currency and erasing debt. What they are ignoring is the deep structural and cultural issues that also must be addressed when mentioning the economics behind EU stability.
It's not often I agree with politicians, but I see wisdom in Blair's comment: "Frankly, what it needs is growth plus reform." Yes!!! It may sound ironic but growth and reform are like ying and yang, and each is essential to make a complete solution. Sure, you can reform everything and anything, but how do you replace the broken pieces in a way that makes sense not just for 2012, but for 2020 or some other other near-term milestone? Some of sort growth engine is critical... and I don't just mean old-style capitalism models. Someone smarter than me must have some brillant idea of how to get Europe to work as a whole again.
FWIW, here in Spain, we have a Prime Minister who got a lot of heat for making ignorant off-the-cuff comments (#SpainisnotUganda). It would be almost comical if Spain wasn't in such a sad state (we have more than 24% unemployment here - how can any Western country and the fourth-largest EU member have such an atrocious number if it didn't have major structural problems that austerity measures will simply not fix?!?). From where I'm sitting and from the comparison I see in this BBC chart, maybe some of these developing regions could offer the EU some advice ;-)
Jennifer, as of now Galaxy had made enough sales & profit to the parent company. But I don't think that may be the case for atleast next 2-3 quarters, due to the launch of low cost Google Nexus 7, Amazon Kindle, MS Surface etc. They may lose the grip over European mobile market, due to high competition.
Jennifer, I couldn't agree with you more. Lagarde and co can only offer talks and further austerity measures with no outright solution to the continuing plague. Germany and the rest oppose growth solution because to them it's simply a currency or debt crisis not a balance of trade issue. Here in the UK, its further government cuts etc. I hear talk of possible break up of EU. Will this alter anything? It's become politically marred now. Here's what Tony Blair Former UK prime minister offers, http://www.tonyblairoffice.org/news/entry/tony-blair-europe-needs-a-grand-plan-to-save-the-single-currency/
Right, Bolaji... there is a double whammy.... you have to hold the line on savings while spending money to move forward. That applies to government, companies and individuals I think. Somewhere in all the noise and in-between the ups and down, fiscal sanity has to be a common denominator across the board.
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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