A 'Typical' Consumer Electronics Show: No Killer New Category

By Gary Kim January 10, 2012

With the Consumer Electronics Show underway, it will be impossible to avoid the subject of consumer electronics trends for the balance of the week, especially the topic of “what the next big thing” will be in 2012.

But sometimes whole years pass without any clear “big new thing” arriving, and that probably is going to be the case in 2012, despite the heralding of “ultrabooks.” For one thing, it would be exceeding rare, if not unprecedented, for a truly big “new thing” to happen two years in a row.

In 2011, tablets clearly demonstrated they were the hot new category, even though one might also say the trend has been building for a couple of years.

But there also is trouble in the market. Total consumer technology sales (excluding mobile phones, tablets, e-readers, and video games) fell 5.9 percent to around $9.5 billion for the five weeks ending December 24, 2011, only a slight improvement over the 6.2 percent decline in 2010, according to NPD Group.

In other words, except for the smart phone and tablet categories, we have been through two years where buyer enthusiasm has waned. The economy probably hasn’t helped, but to the extent there has been growth, it is in mobile devices.

Neither PCs nor TVs have been leading categories for a couple of years. Sales for those two core categories dipped four percent compared to 2010, and unit volumes were essentially flat on a year-over-year basis.

Excluding TV and PC sales, as well as mobile phones and smart phones (significant exclusions, one might argue), the rest of the market dropped by more than seven percent in 2011 in terms of revenue. DVD players, stand-alone GPS devices and MP3 players were among the declining product categories.

Those trends probably will not change much in 2012, despite the new attention on the ultrabook category.

Hot new mobile devices -- including smart phones and tablets -- have been the big winners of late.

But it might also be quite fair to note that “big new trends” do not emerge every year. Among the devices of recent years to have been the "big thing" at CES are netbooks (up and down), 3D TVs (hasn't taken off), tablets (clear winner).

But in decades past, there have been entire shows where nothing even that pronounced really has emerged. Some years, the industry itself looks only to refine an existing trend, because there is, in fact, no "hot" new product category.

In fact, in some past decades – decades -- there has truly been no really significant new category. The last decade has been relatively prolific in that regard, with high-definition TVs, flat screen TVs, GPS, the MP-3 player, the iPhone, smart phones and tablets emerging. But that pace is relatively unusual.

To the extent you can say there is a "new category," it would be ultrabooks, the new "thin and light" notebook PCs that are supposed to compete with the Macbook Air. If you think about it, you can probably see the problem here. Most people do not buy the Macbook Air when they buy a PC.

They mostly buy notebooks, it is true. But the Macbook is at the high end of the market, and most people do not buy products at the high end in any market. So a reasonable person might argue that although ultrabooks are nice hardware, they will not create a big new market.

If pricing stays high, then few will be sold. If pricing drops, as virtually everybody expects, then ultrabooks will simply become the new form factor for many notebook PCs.

Though consumer electronics manufacturers and retailers always hope a hot, new and substantial category will emerge every year; that historically is the exception, not the rule. 2012 appears to be one of the more-normal years, which is to say more inconclusive years.

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Gary Kim is a contributing editor for TechZone360. To read more of Gary’s articles, please visit his columnist page.

Edited by Rich Steeves

Contributing Editor

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