Consumer Electronics Market in Austria-Dissertation Writing Help
Executive Summary
Positive Development in 2008
The overall
market performance of consumer electronics products in Austria was rather good
in 2008. Although growth in value sales of consumer electronics products was
slightly down on the previous year’s level, it was higher in 2008 than in any
other year of the review period. The main product categories driving the
sector’s performance were digital products and those that offer convenience and
mobility such as mobile phones and portable multimedia players. Digital TVs
continued to perform well as observed in
2007. Portable computers and especially laptops were driving the sales of
computers. The performance of in-car consumer electronics products was entirely
dependent on the performance of navigation systems.
Up-to-date Solutions Are the Latest Rage
The influences
of modern technology and ever more trendy lifestyles were evident in consumer
electronics in 2008. Launches of new products and of improved versions of
previous models were flooding the consumer electronics market. Advanced
features and state-of-the-art equipment were a must among consumers. Analogue
products became obsolete and their sales declined sharply, and many
manufacturers stopped producing them entirely. New digital media such as
blu-ray disks and players offering better picture and sound quality are the
latest rage in consumer electronics. Consequently, those sectors in which up-to-date
technology has not made a major impact performed rather weakly.
the Most Successful Subsectors in Austria: Digital Tv, Digital Mobile Gadgets
HDTV was one of
the fastest-growing product categories in 2008. With digital broadcasting
becoming available almost throughout Austria, consumers rapidly started to
replace their analogue devices with digital ones. Higher-definition sound and
greater picture resolution were reasons enough for the general switch to
digital TVs. Sales of digital cameras also recorded strong in 2008 in response
to this trend. Portable multimedia
players and laptops were also in the product categories whose sales benefited
from their convenience and portability. Navigation systems were the absolute
winner in consumer electronics in 2008. This subsector drove not only the
performance of the entire in-car consumer electronics sector but also the
overall performance of the consumer electronics sector.
Harsh Competitive Environment
With a vast
number of producers, ranging from big global players to small and little-known
manufacturers, the market in consumer electronics products was characterised by
a harsh competitive environment in 2008. In some smaller sectors, single global
players were able to hold the overwhelming market share, whereas in larger
sectors even they had to fight for share on account of their fragmented
markets. The majority of these producers were big global players, which makes
it impossible for domestic players to play a notable role. The major
multinationals were present and held one of the three leading positions in
nearly all subsectors.
Positive Development in the Future
Consumer
electronics products are expected to perform very well over the forecast
period. Levels of demand for digital products and advanced technology are
likely to increase in future, and producers will do their best to deliver such
products and elicit consumers’ interest and curiosity. Analogue products, on
the other hand, may disappear completely from the shops as they are predicted
to perform very weakly over the forecast period.
Key Trends and Developments
the Digital Euphoria
As the first
decade of the new millennium draws to an end, technology continues to develop
rapidly, as yesterday’s novelty becomes today’s history. New and even more
advanced devices and appliances emerge every month and consumers are becoming
increasingly curious. Digital broadcasting has already taken hold of Europe,
and was introduced to Austria in 2006. The advantages of the new technology are
numerous and various, and the digital euphoria continues to dominate the
consumer electronics sector.
There are
several types of digital broadcasting in Austria: DVB-T is the digital
terrestrial signal offering several national digital channels; DVB-C is the
digital cable signal, which offers more programmes; and DVB-S, the digital
satellite signal, is the most popular in Austria since it offers the largest
number of channels. IPTV (Internet Protocol TV) is also available in Austria,
offers the option to receive the digital signal via Broadband Internet and
connect one’s computer to a TV.
Current impact
The trend
towards digital products is observable in nearly all sectors of consumer
electronics. The televisions sector is being driven by the strong performance
of HDTV. Even though the analogue broadcasting signal is still available in
some areas of Austria, consumers are rapidly replacing their analogue devices
with digital ones.
HDTVs offer
greater picture resolution and higher-definition sound, thus providing the ultimate
in entertainment and enjoyment. The feeling of having a private cinema in one’s
own home is overwhelming for many consumers. In addition, DVD players are
slowly being replaced by blu-ray players – the new medium that corresponds to
the digital television. The trend towards digital products has influenced the
cameras and camcorders subsectors as well.
Outlook
This trend
toward digital products is expected to displace analogue devices entirely out
of use. More consumers will replace their old TVs with new digital models, and
all broadcasting in Austria will be digital by the end of the forecast
period. All Austrian households are
expected to switch over to a digital broadcasting signal by 2012.
Cameras and
camcorders will also be affected by this trend as analogue devices will
literally die out in these sectors. Higher picture resolution as well as larger
displays and additional features such as motion and facial recognition will be
a must for purchasers of digital cameras or camcorders.
Future impact
In the future
this will lead to even harsher competition among producers as they strive to
introduce new products that incorporate unique features. It will be almost
impossible for manufacturers to continue making unique products in this sector,
as they are all expected to invest in further research and development in order
to introduce products that will attract consumers to their brands. Nevertheless
the trend towards digital products will be positive overall. With digital
broadcasting providing the ultimate in picture and sound quality, consumer
satisfaction is guaranteed.
Austrian Demand Driven by Convenience, Ease of Use and Mobility
Busier
lifestyles and the increased trend of being continually on the move have led to
increased demand for convenience and functionality. The lack of spare time,
especially among working people, has led to increased demand for products that
comprise several features in one. In addition, these products need to be both
user friendly and stylish.
Mobility is
another important feature that is very much in demand. With a vast number of
people now constantly on the road, demand for state-of-the-art mobile phones,
laptops and pocket PCs is increasing. These devices provide a feeling of being
close to people from one’s own area despite being miles away.
Current impact
The trend
towards convenience has influenced many sectors of consumer electronics. In
computers, sales of laptops increased by 14.0% in 2008, while sales of desktops
are facing a decline. Many producers decided to respond to this demand by
introducing products that meet consumer demands. Thus, Sony introduced the Vaio
TZ laptop, which features a battery that can last up to 7.5 hours, thus
enabling consumers to use it during shorter flights and bus rides without
needing access to an electric socket.
New product
launches in mobile phones also indicated manufacturers’ increased attention to
consumers’ demand for convenience. Samsung introduced a new and innovative
product in keeping with this trend, which resembles a concept introduced by
iPod and Nike+ in 2006. In cooperation with Adidas, Samsung introduced its
miCoach mobile phone, which is also a personal trainer. Via a Bluetooth device
that is placed in the user’s sneakers, the miCoach records his or her personal
data such as the numbers of steps and heartbeats. These recorded data can later
be entered on the product’s dedicated website, and this suggests a personal
exercise programme suitable for the individual user.
The in-car
consumer electronics products sector is also being influenced by this trend. This
is especially notable in navigation systems, which also come with many
additional features such as an ability to recognise traffic signs and speed
limits, a true-to-life road image on the navigation device’s display,
voice-operated commands, etc. All these features are set to provide help and
enable users to achieve the shortest possible travel time and improve the
efficiency with which they use their time.
Outlook
Consumers’
demand for greater convenience will prevail over both the short and long term,
as they will need products that respond fully to this need and improve their
quality of life. As the dynamic pace of everyday life is not likely to
decrease, mobility will be one of the most important factors influencing the
performance of the consumer electronics sector over the forecast period.
Convenient products, such as the mobile phone with an integrated navigation
system, are certain to attract additional consumers as constant traffic jams in
big cities can be really tiresome and affect people’s mood.
In addition,
portable media players that can be used by individuals to carry large amounts
of data also provide the pleasure of listening of music in high-definition
sound or watching a video with a good-quality picture. Such products are
especially convenient during long commutes.
Future impact
The consumer
will start to rely increasingly on electronic devices over the forecast period.
Atomisation and appliances that not only make life easier but also replace
services formerly provided by humans will be very popular in the future. (For
example, the iPod Nike+ Chip provides a music playlist that is suitable for
exercise as well as creating a training plan that is appropriate to the
individual user.) In the long term, this may lead to unhealthy lifestyles as
consumers increasingly rely on devices and become less physically active. With
manufacturers constantly offering more advanced technologies, however, working
people will have a hard time deciding which of them are necessities and which
are purely vanity purchases.
Energy Efficiency – An Emerging Issue
Global price
increases and the increasing costs of everyday living world-wide are having an
influence in Austria as well. People have become accustomed to a rather
leisurely way of living regarding their personal expenditure, but the general
cost of living has now increased significantly. The Austrian electric utility
“Wien Energie” increased its prices for heating and electricity by roughly 35%
from November 2008.
In addition,
leaving electric devices on “standby” is also becoming expensive, whether for a
washing machine or a notebook, since household appliances absorb electric
energy when plugged in even if they are turned off (on standby). This is
forcing manufacturers to concentrate their attention on more energy-efficient
products.
Current impact
This new
consumer trend is affecting some of the most successful sectors of consumer
electronics such as TVs and computers. The producers of TVs predicted this and
all new models absorb less energy while on standby, so this represents only a
fraction of the total electric power used by the TV when it is turned on.
Nevertheless,
GfK compared the consumption of electricity of two plasma TVs with a screen
size of 42 inches, of which one was low current and the other conventional. The
experiment revealed that the low-current TV consumed roughly 215 watts while
the conventional model absorbed 380 watts, which represented a significant
difference. Over a longer period of time, with an average viewing time of four
hours per day, the electricity needed to operate the low-current TV would cost
roughly €60 per year while that for the regular model would cost roughly €110
per year.
Recognising
this, Sharp has unveiled a prototype of a TV powered by solar cell energy. The
product has a 27-inch screen and a solar module of approximately the same size.
According to Sharp, this LCD TV is more energy efficient than an analogue TVs
and also in comparison with other LCD TVs. This product is not yet available in
the Austrian market.
Outlook
If energy costs
increase further or remain at the current level for a longer period, products
such as Sharp’s prototype might enjoy a real boom in sales. The current
scenario is likely to cause consumers to include energy efficiency as one of
the main factors in their purchasing decisions. Consumers are expected to turn
to low-current TVs, which absorb less energy. The solar cell power supply may
represent an important feature of the consumer electronics sector over the
forecast period.
Future impact
Consumers may
pay more attention to the prototype technology introduced by Sharp.
Energy-efficient TVs and similar products from other sectors of consumer
electronics will probably trigger a new trend over the forecast period as
consumers look for such products. Solar cell power is quite a revolutionary
concept and it might be seen in commercial use in Austria in the future. One
way or another, both consumers and manufacturers will need to place greater
emphasis on the energy-efficient products within the consumer electronics
sector.
Consumers Look for Creative Concepts
In these highly
developed and competitive markets, new product launches emerge every month.
Manufacturers are fighting for market share by introducing products similar to
those introduced by their main competitors. Consumers are therefore presented
with a wide range of products that all look alike but rarely offer true
novelty, so they look for products that offer one of two features that make
them unique and distinguish them from the vast majority of similar
introductions. They look for creative solutions that will arouse their
interest.
Current impact
Recognising
this, some producers have focused on introducing true novelties into the
market. One such producer is Samsung, which focused on the current trend in
advanced technology and also on creative solutions. Samsung introduced the E200
ECO, the first environmentally friendly mobile phone, which is made of
“bio-plastic”, produced from corn and absolutely PVC free. In every other
aspect it is a regular mobile phone with all the usual accompanying features,
but in terms of innovation it represents a true novelty. Samsung was not the
only one that concentrated on intelligent introductions. Hyundai Mobile Europe
introduced the first “Handy Watch” (MB-910) to the Austrian market, which looks
just like a watch but incorporates all the mobile phone features such as mp3
player, GPRS, large display, etc. The communication is carried out via
Bluetooth or via an integrated hands-free set.
Outlook
Consumers are
likely to demand more products of this type over the forecast period, and the
importance of true novelty should not be neglected. The demand for the E200 ECO
and the “Handy Watch” is expected to increase during 2009, and this trend will
also influence the manufacturers that are likely to shift their attention to
developing creative concepts for their new product launches. The “Handy Watch”
also provides very important features of convenience, and this may lead to the
emergence as the new standard product of a mobile phone that can worn on the
wrist as a fashion accessory, watch and mobile phone.
Future impact
In future,
intelligent solutions will be the source of a major boom in the consumer
electronics sector. Products such as those described here may threaten the
sales of other state-of-the-art products introduced in 2008. People who are
increasingly ecologically aware will want more products such as the Samsung
E200 ECO, whereas true fans of gadgets will look for products such as the
Hyundai “Handy Watch”. The producers will therefore shift their focus to the
launches of similar products.
Online Distribution and Marketing Increase
The Internet has
now become a necessity in Austria. Almost every idea, thought, piece of information
or question has become unthinkable without the Internet. People use it as a
dictionary, as an encyclopaedia, as a post office and – in one sentence – as
the one place where one can ask or find anything one needs. An increasing trend
to make purchases on line is also noticeable in Austria, especially in the
consumer electronics sector.
Online activity
increased in terms of advertising as well. According to current figures of
Market Research Institute EITO, the global sales achieved through banner ads, sponsored
links and other online advertising formats grew by 23% to around €31.7 billion.
Online advertising in Europe and in Asia recorded above-average growth. In the
European Union, online marketing activity increased by 31% to reach €9.1
billion in 2008.
Current impact
Both trends are
clearly observable in the sector of consumer electronics. Online purchases of
TVs and projectors, digital cameras, camcorders and mobile phones increased
significantly relative to the review period. The consumers have placed great
emphasis on the use of the Internet, and Internet selling through sites such as
eBay can often be very lucrative.
Many
manufacturers within the consumer electronics sector promoted their products
through online campaigns by providing interactive websites, presentations and
online games, in order to attract consumers. For example, Sony and Acer have
both promoted their new laptops through online advertising. Acer provided a
presentation of its new notebook whereas Sony presented its new product through
an online high-quality video. Navigon AG advertised its new navigation device
via high-quality Internet presentation and banner ads.
Outlook
This trend is
expected to continue, and to assume increasing importance, over the forecast
period. More consumers will probably recognise the benefits of online
advertising, especially since the Internet is the most visited place on earth.
The Internet attracts more users each day than any TV channel, sports event or
any other type of gathering. Moreover, increasing numbers of Austrians are
expected to purchase consumer electronics products on line. With the emergence
of numerous online shops, there will be no need to go to the physical shop or
walk around searching for the right product.
Future impact
Increased
Internet advertising may have a negative effect on other media over the
forecast period. The EITO figures suggest that online advertising may seriously
threaten advertising through TV, radio or print media if current trends
continue. Increasing numbers of Austrians are also predicted to buy their
consumer electronics products on line as the Internet offers low prices, which
are rarely found in conventional shops.
