PC and Consumer Electronics Vendors at the recent CES show in Las Vegas are looking to Australia and emerging Countries such as India and Russia to help them through a massive downturn in both Europe and the USA.
PC and Consumer Electronics Vendors at the recent CES show in Las Vegas are looking to Australia and emerging Countries such as India and Russia to help them through a massive downturn in both Europe and the USA.
And in another key move PC vendors who have seen desktop PC sales decline in favour of Netbook’s and notebook’s are now making a major play to win consumers back with all in one PC’s that include duel TV tuners, Blu ray players and branded audio systems.
Among the brands set to launch new offerings this quarter are Lenovo, HP and Dell who is set to roll out new all in one PC offerings and new wafer thin notebooks that will take on the new Apple MacBook.
In the US the biggest CE vendor Circuit City has called in the administrators with vendors such as Sony, Samsung and LG admitting that they are facing losses of over $300M. In contrast, in Australia several vendors have reported excellent December January sales with retailers like JB Hi Fi confident that they will achieve 26% growth for the quarter.
Carl Rose the Managing Director of Sony said “We are optimistic. The dollar is a big problem for Japanese Companies however we have sold out of notebooks and TV’s during the holiday period. We are currently evaluating our pricing and over the next few months we will launch several new Sony products”.
Unlike his global parent Company, Rose has admitted that Sony Australia is profitable which is due in part by premium pricing he said.
“We are a premium brand and we have invested significantly in the brand in Australia. We are currently #1 in TV’s however going forward we are going to have to make sure that we have the right products at the right price. We know that several brands are set to invest in marketing during this downturn and we intend to grow our market share if possible”.
According to BusinessWeek a global report issued on Jan. 14, market watcher IDC declared the fourth quarter a big problem with PC unit sales down 0.4%. IDC forecasts lean times ahead for PC makers, with a 5.3% decline in sales for 2009 and a slow recovery in 2010.
Other analysts warn that things are likely to get even worse than they did in 2001, when PC unit sales declined 5%. The economic pain has spread wider this time, and overall trends are unpredictable. “This is a quantum event,” says Roger L. Kay, president of consultancy Endpoint Technologies Associates. “It’s different than we have experienced before. You have to throw out the old rules and start fresh.”
Analysts at the recent CES show said that most of the major PC makers are equipped to withstand a long recession. They trimmed inventories and stockpiled cash reserves. But the slump will still cause plenty of pain. One reason: The fastest-growing segment of the market is so-called netbook’ stripped-down notebooks that cost $300 to $500 and deliver far less profit than standard notebooks. Another negative is Microsoft’s next operating system release isn’t expected until sometime next year, so many corporations may wait to upgrade their computers.
The rapid deterioration in the PC business may lead to a shakeup that could reverberate through the tech industry. Among the potential losers are Dell and Lenovo, both heavily concentrated in the stagnant corporate market. Lenovo said on Jan. 8 that it will cut 11% of its workforce and slash executive pay. Dell fired executives and cut expenses.
For many vendors Netbook’s are not good business. Analysts say Intel has to sell three times as many Atom processors, which power Netbook’s, to make as much as it does selling a single conventional notebook processor. Microsoft is said to get about $13 per copy for the Windows version that goes in Netbook’s, vs. more than $50 for those that go into standard PCs.
Apple is not alone in witnessing declining sales Market researcher NPD Group says sales of Macintosh computers declined 1% in November, which could be an indicator of what’s to come.
