Reasons to be cheerful
06 January 2009
There are strands of logic that can be pulled together to form a brighter picture for the UK electronics industry in 2009.
A chilly start to 2009 in the UK and if all predictions are correct then it's barely going to rise above the lukewarm in the electronics market for the rest of the year. It is clear that certain sectors, most noteably automotive, are already being badly hit, while many others are keeping their heads low wondering if the whole credit crunch might pass by leaving them unaffected.
It is a subject that will inevitably come round again in this column and doubtless countless other forums over the coming months, but it is not one that I will dwell on this week. This is in part at least because I am currently looking forward to what will be the good news stories for both the next year and the next week.
Firstly, the next year will be an interesting one. I genuinely do believe that the current economic gloom will not turn out to be as murky for the electronics industry as some assume, and neither will it last as long. I base this optimism on two themes. One is that the electronics industry was vastly ‘over-fuelled’ when the dot.com bubble burst in 2001. The frenzy for growth led to massive over-capacity across the whole industry and it took several years of painful correction to bring it back in line. But that left a leaner, meaner industry behind which is better aligned to the needs of the market – there is neither need nor room for such a correction in 2009.
The other reason is that there is so much demand for affordable electronics as a component part of just about everything that people might want to buy. Except cars of course - people seem to be making the choice to delay the purchase of new cars for the time being. I am not so sure that the same restraint is in evidence elsewhere though. Reports are that LCD televisions are going to carry on growing through the year as quality improves and prices drop. In truth, there are few things that a consumer might buy that hasn’t come within grasp of most people. I’m not saying that I can rush out and buy the digital camera that I really want, but I could afford a camera that I would like.
In other sectors, like industrial and medical, where cost savings are vital, the investment in better equipment with advanced electronics can be the route to becoming more efficient. And investment in defence tends to be sufficiently long term to be untroubled by the current situation. On top of all of this is the strength of the electronics industry in the UK that revolves around innovation and specialisation, and as long as we remain focussed on what we are good at then we stand a good chance of bucking the trend of the rest of the economy.
Secondly, I was going to look forward to next week as it is the industry’s most extravagant bun fight of the year - the Consumer Electronics Show kicks off in Las Vegas. If ever you are looking for an antidote to negativity then this is it, a heady cocktail of glitz and gadgets that is expected to attract around 130,000 people from all functions within industry. It is a great place to keep abreast of emerging trends and, as not that many will consider it worth making the trip, there is wall-to-wall coverage on the web. The organisers' own web site ( www.cesweb.org ) is as good a place to start as any.
I expect that top of the menu will be double helpings of functionality with every portable device and everything with internet, but there will be endless tasty morsels to please every palatte.
Anyway, I hope you enjoy this week’s newsletter and we look forward to your company throughout 2009 – I hope it is an enjoyable and successful one for all in the UK electronics industry.
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