Tuesday, December 14, 2010

Do Consumer Electronics Trends Tell Us Anything About Content Consumption?

Best Buy has reported "difficult" third-quarter earnings. Best Buy Co. reported a 4.4 percent drop in fiscal-third-quarter profit on weak sales trends on Dec. 14, 2010.

The company also reduced its per-share profit forecast for the year to $3.20 to $3.40, below the level it had seen before raising the view to $3.55 to $3.70 in September.

Market share shifts might explain some of the activity. Maybe it explains nearly all of the weakness. The company said it was facing market share pressure, and one would have to think Wal-Mart and Amazon are factors.

But broader industry data on retail sales for November 2010 suggests electronics are not selling as well as other categories, which might seem curious in light of strong demand for tablet PCs, e-readers and smartphones. Electronics sales in November were were up 0.9 percent from November of last year, while total retail sales were up 7.7 percent from last year. Sporting goods were up 12.3 percent from last year. Clothing was up 7.5 percent. Food and beverage sales were up 3.2 percent.

One has to wonder if the sales weakness, notwithstanding strength in tablet PCs and smartphones, suggests something about changing consumer demand for products that support some content consumption modes. Some think the newer devices are enabling consumer use of "non-traditional" content applications and services.

By way of example, more people choosing to watch movies on their tablets or PCs or smartphones might mean less demand for big-screen TV displays. Online delivery might be cutting into demand for Blu-Ray players.



1 comment:

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Hi,

A recent trend in many types of consumer electronics is connectivity. It's usual for many products to include Internet connectivity using technologies such as Wi-Fi, Bluetooth or Ethernet. This is really interesting take on the concept.I never thought of it that way.Thank you for sharing it with us.

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