Will Innovative, New Electronics Revive Economy?
The third time is bound to be the charm. After predicting in his last two keynote addresses at the Consumer Electronics Show that innovation from the consumer electronics would help the U.S. economy rebound, Gary Shapiro is standing by his message.
The president of the Consumer Electronics Association, and author of the new book "The Comeback: How Innovation Will Restore the American Dream," believes that America’s love for these products will help bolster the economy.
“The U.S.,” he says, “is in trouble and innovation is the best path towards letting our kids have a better future.”
The question is now whether there is enough innovation to jump-start things for 2011, especially after consumer confidence unexpectedly dipped in December. The Conference Board last Tuesday released a private report that said its index of consumer attitudes slipped in December. Shapiro says we will see improvement in 2011.
“I do believe that consumer electronics has been a savior for the economy,” says Shapiro, noting that sales were down in 2009 but that 2010 actually saw growth. The Consumer Electronics Show, which had also seen declining attendance numbers over the last two years, is also predicted to be way up, according to Shapiro, “in every sector possible. There is phenomenal optimism.” The event begins January 5 in Las Vegas.
Shapiro adds that the message over the past two years has been to “innovate or die,” and companies are clearly getting the message. For 2010, there had been no shortage of innovation, beginning with the introduction of 3D TV a year ago. Since that time there have been other categories, including tablet PCs, smart phones and motion-controlled video games.
Thus, it does not seem like this is the end of the innovation, or even the beginning of the end. In some ways, to paraphrase Winston Churchill, 2011 could be the end of the beginning of the next cycle of innovation.
“We’ll look back on this as a transition time,” says Stephen Baker, vice president of industry analysis for the NPD Group. “This is a business that depends on those innovations. There is way more than enough for 2011.”
More importantly says Baker, the categories that did come out in 2010 haven’t come close to reaching a critical mass, something that will likely start—and only start—to happen in 2011. “The products have barely scratched the surface in 2010, so they still have a long way to go.”
Some of this optimism for 2011 stems from the underperformance of new products for 2010. One in particular that has a ways to go, despite a lot of hype in 2010, is 3D. This technology promised a whole new experience for home movie viewing, but yet, as Baker noted, has barely scratched the surface.
Part of the problem was, no doubt, consumer confusion, lack of content and, not to mention, the fact that you needed to put on a pair of glasses to get the full effect.
“Last year 3D was badly mishandled,” says Stephen Smith, editor-in-chief of TWICE, the trade magazine for the consumer electronics industry, “The sets should have been pushed as higher end TVs that could make your existing content look better. Instead a lot of the advertising made it seem like it only did 3D and couldn’t even play your regular 2D movies. This message will be better for the New Year.”
Experts agree much of this messaging will be better handled in the New Year, noting that 3D will likely move from an “early adopter” technology toward the masses, and even be one that will eventually ditch the dorky glasses. But as with Blu-ray, and DVD before it, it won’t happen in a single year.
In the meantime, 3D is already spawning other sub-sectors, including 3D photography with digital cameras and camcorders.
Smith also says that 2011 will be about not only 3D TV but also IPTV, as in Internet Protocol TV, and that many sets will handle both. Companies such as Sony and Panasonic have already been in this market with Internet-compatible TVs, but Smith predicts this market will only get bigger as consumers continue to move away from traditional cable and satellite services and look at alternatives.
Internet capable TVs allow for greater ability to stream movies and other content directly to the TV in the living room, as well as through the house thanks to other products that will be IP-ready.
“We’re going to see connected everywhere,” says Shapiro. “This will be Internet everywhere and in all sorts of products.”