Charging for Growth

The Eureka Park TechZone, focused on entrepreneurs and startups, launched at the 2012 CES.

The Eureka Park TechZone, focused on entrepreneurs and startups, launched at the 2012 CES.

By David Gill

The 2013 version of the International CES will take place in the midst of what the industry hopes is the start of a major growth spurt in the category.

Given the weakness and slow pace of the economic recovery, coupled with uncertainties in the jobs picture, consumers have been putting off purchases of big-ticket consumer electronics, such as televisions, over the past two years. With 2012 winding down, however, there are signs of hope in the industry.

The CEA index, which is provided by International CES’ host and manager, the Consumer Electronics Association, in September hit 92.4—its highest level of the year. In addition, consumer confidence overall is heading on an upswing, with the consumer confidence index compiled by The Conference Board reaching 70.3 in September, its highest level since February.

Both indicators bode well for consumer-electronics retailers and vendors with the all-important holiday season at hand. The hope for the industry is that CE purchases accelerate during the holidays, and that the momentum carries over into the New Year.

“Despite rising gas prices, uncertainties overseas, domestic elections and the slow recovery of the U.S. economy, an improved stock market and an increase in housing prices has consumers feeling more confident about their financial future,” said Shawn DuBravac, CEA’s chief economist and senior director of research.

DuBravac added that the September CEA index reading was at a level more typically seen during the height of the holiday shopping season, indicating “that consumers are likely to buy and spend more on tech in the weeks ahead. The wealth effects are real and will help consumers feel as they are on a firmer ground financially.”

Another source of optimism for CES is the fact that, in spite of the economy’s slow progress, the CE industry is expected to set a record for revenues in 2012. When the year is done and all of the sales are tallied, CE revenues are expected to reach $206 billion for 2012, according to CEA. If this projection is met, it will translate into a growth of 5.9 percent in sales over 2011, and the first time ever that the industry will have surpassed $200 billion in revenues.

As has been the case for several years, the big growth drivers in CE are tablets, smart phones and laptops. “Tablets are the fastest-growing product category in the history of the CE industry,” said Steve Koenig, CEA’s director of industry analysis, “and sales will continue to increase as more products hit the market, offering consumers more choices in size, price, operating systems and app ecosystems.”

In September, CES garnered yet another honor from Trade Show Executive magazine, the award as the most innovative trade show. CES was cited by the publication for initiatives undertaken during the 2012 show to highlight innovation in the industry.

Among these efforts were the launch of the Eureka Park TechZone, which highlighted more than 100 entrepreneurs and startups across a range of categories. Also, the 2012 CES introduced the Entertainment Matters program, which was designed for the content and entertainment industry. In addition, the 2012 show held conferences and exhibits specifically focused on digital health and fitness products.

One major trend that will be addressed at the 2013 CES is cloud computing, which “is fueling the consumer electronics industry, and business in general, by revolutionizing the way we store and access information,” said Karen Chupka, CEA’s senior vice president of events and conferences. Part of the show’s layout will be CloudBase3 Apps, a new TechZone dedicated to cloud computing. It will showcase demonstrations, education and information about cloud computing for both small and large businesses.

Another feature of the show will be an expanded Developer University, which will bring application developers together with platform vendors. Developer University will help app developers learn about the numerous opportunities available to them, and will clue in platform vendors to a larger audience of developers.

The keynote speakers at the 2013 CES will include Lowell McAdam, chairman and CEO of Verizon, and Kazuhiro Tsuga, who was appointed president of Panasonic earlier this year.