Now that the kids are back at school powering up their new laptops and tablets, electronics companies are crossing their fingers and hoping for that bright shopping light to shine at the end of the year.
The Christmas countdown has begun, and all sorts of trend counters are trying to figure out how many new phones, tablets, computers, appliances, TVs, and pick-your-gadget-of-the-year will be unwrapped in a few months.
ShopperTrak, a research firm that analyzes retailer foot traffic, anticipates decent growth for the coming Christmas shopping season -- except for electronics. On the upside, overall national retail sales in November and December should rise 3.3 percent from the same period last year. The downside: In the electronics and appliance sector, foot traffic should drop 8 percent, though sales should increase 1.5 percent.
Bill Martin, ShopperTrak's founder, said in a press release:
Some of the traffic decline in the electronics and appliance category can be attributed to consumers going online to research premium-priced purchases or to purchase items at discounted prices. You can't, however, ignore the fact that 92 percent of total GAFO [general merchandise, apparel and accessories, furniture, and other] retail sales still occur in brick-and-mortar stores. Retailers who align their in-store and online strategies to provide multiple touch points and distinct value offerings for consumers will come out on top.
OK, so that's a glimmer of hope. Christmas may not be a washout. Still, it has been a depressing economic year by and large for many high-tech firms, and other headlines give me a tempered view going into the last quarter of 2012.
Royal Philips Electronics N.V. (NYSE: PHG; Amsterdam: PHI) , a European bellwether, is going through a multi-year restructuring to cut costs. Last week, it said it will have to cut another 2,200 jobs to save an extra €300 million ($389.5 million) as economic conditions deteriorate further. These cuts, in addition to the 4,500 announced previously, "bring the cost-cutting target to 1.1 billion euros by 2014," according to Bloomberg Businessweek.
Also, exports from Singapore, a key Asian supply chain hub and the place where many high-tech companies run their logistics operations, dropped more than economists anticipated in August. The primary reasons cited were lower European demand and weakness in China.
Looking at these numbers, maybe it's not a surprise that this year's IFA, a tradeshow for consumer electronics and home appliances in Berlin, broke records. From the end of August to early September, 1,439 exhibitors presented product debuts to 240,000 attendees (up 1 percent from last year).
Maybe with the broader market uncertainty, hitting the showroom floor and scouring for deals among colleagues isn't such a bad idea.
Re: "it said it will have to cut another 2,200 jobs to save an extra €300 million ($389.5 million) as economic conditions deteriorate further" hash.era9/23/2012 11:13:15 PM
True Rich and I feel that it will be a long christmas this time. There are so many people who has qualifications plus experiance waiting outside for a job. I feel the job market is sewcure right now but not stable since one little collapse will shake everything all over again.
Other factor is that the job seekers will go for any salary right now just to make sure that they are not un-employeed. This will create a big issue in the market where people will be hired not on qualifications and knowledge but on salary expectation which is not good at all.
Re: "it said it will have to cut another 2,200 jobs to save an extra €300 million ($389.5 million) as economic conditions deteriorate further" Rich Krajewski9/23/2012 2:46:24 PM
"Job cuts will be there even though the market has settled upto some extent. It will continue to be the same for a couple of years more since the companies have to make up for what they lost during the crisis."
Companies are going to have to wait a long time, then. Lost productivity is lost forever, or so I understand. Can't go back in time and make up for what's gone. Maybe you're thinking that companies will want to make the retained earnings accounts a little fatter before going out and investing more. The problem is, labor is thinking it should be cautious, too, so we have a perpetually dampened system at work that keeps the economy stuck in slow growth.
Without some kind of intervention, such as a war or some enormous technical breakthrough to goose the system into growth again, we likely will continue globally slow growth. Of course war is like taking certain kinds of drugs. You may get a temporary boost, but you also do long-term damage. Still, history points in that direction.
Some Christmas. I hope I'm wrong. But, I don't see China and Japan patting each other on the back. Instead, I see warships.
Re: "it said it will have to cut another 2,200 jobs to save an extra €300 million ($389.5 million) as economic conditions deteriorate further" Rich Krajewski9/23/2012 2:33:12 PM
"The consumer electronics companies are definitely looking for a great christamas season."
I hope they like coal, because I wouldn't be surprised if that's what they get this year.
I can see product-units-sold climbing, as we start to see more and more $89 tablets being pushed through the discount channels such as Big Lots. Maybe even revenues will climb a modest percentage. But I can't believe margins are going to be sustainable at healthy levels. I mean, there are basic, usually recession resistant companies going out of business near where I live. Plumbers, bars, and pizza places are closing shop. This makes me suspect that the US is in much worse shape than you'll ever read about in the news. And regardless of what the government says, prices for the basics (for non-electronics, that is) are doubling and tripling, while incomes are likely declining in real terms (not the "real" terms that the government publishes, which are anything but real).
If it's a good sales season this year, it will be just an "up day" in the hospice, in my opinion. I hope it's more than that, but I'm pessimistic.
Speak to 6 different pundits and get 6 different views on the economy. I reckon we are still bobbing along choppy seas with no safe port in sight (sorry, that's 7 pundits now). I truly hope the Christmas numbers are good but I would not bank it yet.
Re: "it said it will have to cut another 2,200 jobs to save an extra €300 million ($389.5 million) as economic conditions deteriorate further" hash.era9/23/2012 9:39:52 AM
Job cuts will be there even though the market has settled upto some extent. It will continue to be the same for a couple of years more since the companies have to make up for what they lost during the crisis.
Re: "it said it will have to cut another 2,200 jobs to save an extra €300 million ($389.5 million) as economic conditions deteriorate further" elctrnx_lyf9/23/2012 8:55:00 AM
Are there many more job cuts in the pipe line from many companies. The consumer electronics companies are definitely looking for a great christamas season.
"it said it will have to cut another 2,200 jobs to save an extra €300 million ($389.5 million) as economic conditions deteriorate further" Rich Krajewski9/22/2012 5:20:03 AM
Natural disasters wreak havoc to the tune of $100 billion in annual damages, says a UN report. To cope, companies need improved risk management strategies.
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.
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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