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.