CE OEMs looking for near flat revenues in 1998.........................
widebandmag.com
January 22, 1998
Expect Minimal Gains
In Sales During '98 You don't need a crystal ball to predict that 1998 is going to be a year in which prices for consumer electronics products are likely to head lower. For most industry observers, 1998 is shaping up to be much like 1997. Sort of maintaining the same revenue pace while establishing a platform for an upturn in 1999.
John Briesch, president of Sony Consumer Electronics products says, "We'll be lucky if we see an industry-wide sales increase of one percent. My biggest concern is that consumer confusion over digital TV could cause a slowing for television set sales." Sony expects to dramatically increase sales of MiniDisc product this year and will spend heavily to do so. The firm expects continued strong sales of DVD players and other early stage products such as Web-TV.
"One thing most astute marketers learned this past year was better inventory control," says Zenith Sales President Bill Sims.
"This will be equally important this year." Sims agrees with Briesch that increasing overall industry volume this year will be a challenge. "I see VCR sales flat to down with prices lower. Direct view sales are likely to be flat. However, there should be some large screen direct view growth," Sims says.
The veteran industry marketer believes the industry needs to do a better job of keeping the public well informed. "We offer these tremendous values-but we don't communicate our advantages well enough."
Zenith is expected to be one of the first, if not the first, to ship Divx-equipped DVD players. "We're still studying pricing and marketing programs for this product," says Sims. He urges retailers to be open-minded about Divx. "Divx is a feature-not a format. The consumer doesn't have to rewind after play. There's no having to return to a store after a rental. There are certain advantages. We're saying, 'If this is a winning program, we'll support it.'" He adds the presumed higher rental cost doesn't appear to be a problem. And Sims is highly optimistic about the prospects for HDTV. "We've got a big stake in this-we're one of the inventors," he points out.
One of the industry's most accurate annual forecasters is JVC's executive vice president, Harry Elias. "I'm forecasting industry sales to be up three to four percent in 1998," says Elias. "I know this is counter to what a lot of others are saying, but my observations are based on my many visits to retailers and keeping a steady check on the pulse of the business.
Elias says he believes that the recent Chapter Eleven filing by Nobody Beats the Wiz may indicate a bottoming out of the continuing retail shakeout. "There are perhaps three other regional chains that may be hard-pressed financially but, by and large, most of the survivors have learned to cope with the business realities of today's marketplace," he emphasizes.
Like Sims, he believes that better management of inventories will be a plus for business during this year. He foresees continuing opportunities in large-screen TVs and camcorders. "Our business continues to be good and I am optimistic. If retailers continue to maintain strong fiscal controls and watch those inventories, the stage will be set later this year for some impressive growth in 1999."
****Editor's note: For more industry forecasts, see sections within this issue. |
