Consumer electronics and photo markets worsening. GfK findings for the first half of 2012 at the IFA trade fair
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1 Press Release 29 August 2012 Jürgen Boyny Tel Marion Eisenblätter Corporate Communications T marion.eisenblaetter@gfk.com Consumer electronics and photo markets worsening GfK findings for the first half of 2012 at the IFA trade fair Nuremberg, 29 August 2012 According to GfK, consumers in the six largest Western European countries of France, Germany, Italy, the Netherlands, Spain and the UK have spent less money on consumer electronics in the first half of Sales are ten percent lower than in the same period of the previous year. The photo market is also weaker, with a sales decline of seven percent. These are findings from GfK compiled for the IFA 2012 in Berlin, Germany. In light of the ongoing difficult economic climate, consumers are currently showing restraint when it comes to making major purchases. The only exception is Germany, where retailers have recorded an overall increase of 8.5 percent in sales of televisions and other consumer electronics products. Specific products have, however, been positively flourishing in all countries. For example, Smart TVs, high-quality sound bars, headphones and compact system cameras. In contrast, in some areas competition between traditional consumer electronics and telecommunications and IT is intensifying. Football drives TV sales Despite the European Football Championship, Western Europeans spent nine percent less on televisions overall than they did in the first half of Only in Germany was the television market clearly boosted by this top sporting event, with sales up 14 percent. However, demand did noticeably increase in all six countries shortly before the competition kicked off. This is as a result of many special offers improving trade. GfK SE Nordwestring Nuremberg T F public.relations@gfk.com Management Board: Matthias Hartmann (CEO) Pamela Knapp (CFO) Dr. Gerhard Hausruckinger Debra A. Pruent Supervisory Board Chairman: Dr. Arno Mahlert Which devices are most popular? The trend is still towards larger sizes and better features, although the greatest sales (22 percent) are still being generated by 32 inch models. In the first six months, demand for Smart TVs was particularly high, with sales increasing by 31 percent to 4.13 billion. The same applies to 3D televisions, which now make up more than 39 percent of all sales. For 2012 as a whole, GfK is predicting sales of 38 million TVs for Western Europe, of which more than 10 million will be in Germany. The market for DVD and Blu-ray players and recorders deteriorated in Western Europe in the first half of In comparison with other European countries, the fall in Germany is relatively low, at eight percent. In both Commercial register Nuremberg HRB
2 Spain and Italy, however, sales plummeted by around 30 percent. Consumers now prefer to purchase Blu-ray rather than DVD players. The strongest growth in sales was in Germany, up 42 percent, while the average across the six Western European countries is a 25 percent rise in the number of players sold. As a result of falling prices, in value terms, retailers only registered a sales increase of six percent. In contrast, hi-fi and home movie theater products saw sales fall slightly by 3.6 percent. This is not the case in France and Germany, where consumer spending for an excellent home movie experience increased year-on-year by four percent and almost four percent, respectively. In all countries, the market for speakers improved, with 5 percent more devices sold, generating a value sales increase of 15 percent. Consumers are clearly focusing more strongly on quality as sound bars, which improve sound for the flat-screen LED TVs, continue to be particularly successful. Competition between MP3/MP4 players and mobile phones intensifying The portable audio devices market continues to have problems. In the first half of 2012, sales fell by 17 percent. This is attributable to the strong competition from mobile phones and above all smartphones, which make it unnecessary for many consumers to own MP3 and MP4 players. Accordingly, 17 percent fewer devices were sold overall, which caused a sales decline of 22 percent. Retailers and manufacturers are therefore trying to counter the trend by lowering prices, with the average price falling from 90 in the first half of 2011 to 84 at present. In addition, there are currently no observable technical innovations. It is possible that customers will return if they require devices for use in special areas, such as sport. A more differentiated picture emerges on the market for classic portable audio devices, such as portable radios, clock radios, radio recorders, as well as the new segment of docking speakers. Digital radios still only play a small role at present but, since DAB+ was introduced in Germany last August, demand has increased rather rapidly. Growth has also been strong for docking devices that can play music from smartphones, tablets and MP3/MP4 players. Sales of devices with docking stations increased by eight percent overall. With sales up 24 percent, Germany is the most important market in this segment Consumers in Western Europe spent 11 percent more on headphones overall between January and June 2012, as they purchased more devices at higher prices. Only in Spain and Italy has there been a slight decline on the market for headphones. Models with headband and cable continue to sell well, achieving a 26 percent increase in value terms and numbers sold also up 15 percent. The situation is very similar for digital wireless headphones. 2
3 High-quality digital cameras are clear winner As is the case for consumer electronics, the market for digital cameras in Western Europe also declined in the first six months of the year. However, with a decrease of seven percent year-on-year, the development is slightly better. This is above all attributable to the positive development of high value digital cameras. Consumers therefore continue to be extremely interested in compact system cameras, which evidently offer a good compromise between light compact cameras and large single-lens reflex cameras. This was further boosted by a large number of new models being launched this spring. Overall sales of cameras with interchangeable lenses increased accordingly, by around 3 percent (January to June), with June in fact registering a year-on-year improvement of 28 percent. One in every two euros in this segment is now spent on high-quality digital cameras. Demand for compact system cameras shot up 50 percent in the first half of the year. Despite this, classic single lens reflex cameras still registered the highest sales for interchangeable-lens cameras, at 87 percent. Lenses, of course, also benefited from this development, with sales rising by 8.8 percent in the first half-year. As with interchangeable-lens cameras, customers are increasingly buying more expensive products in this segment too. In contrast, far fewer fixed-lens compact cameras were sold in the first half of the year. Overall, retailers sold 16 percent fewer devices and therefore generated 15 percent lower value sales. However, in this segment, ever more consumers opted for a camera with a price tag above 300. The share rose from almost 25 percent in the same period of the previous year to more than 30 percent in the first half of Affordable compact cameras are the big losers, because anyone who owns a smartphone with a good camera seemingly no longer requires an additional low-cost digital camera. Smartphones are increasingly replacing sat navs for the car Consumers in Western Europe are purchasing fewer electronic devices for their vehicles. In the first half of 2012, the in-car electronics market suffered a sales drop of 19 percent, although it was relatively robust in the United Kingdom (minus 5 percent) when compared with Italy (minus 30 percent). However, the popularity of several niche products continues to rise. In the car radio segment, Western Europeans are not only buying fewer devices, but are doing so at considerably lower prices. Consequently sales declined by 22 percent year-on-year, although only 17 percent fewer car radios were sold. Popular products at the moment are those which make it possible to easily listen to music from mobile phones, MP3/MP4 players and USB sticks. Among others, these include mechaless radios, which no longer have a mechanical drive for playing CDs and DVDs, but play music via bluetooth, USB and MP3/MP4 player interfaces. With sales growth of 3
4 11 percent, the number of customers purchasing these products has risen quite noticeably. Portable navigation devices are suffering quite considerably from the competition of smartphones. Navigation apps are now sometimes available free of charge, which contributed towards a further sales drop of 20 percent in the first half-year, despite significantly reduced prices. Germany continues to be the major market, with 31 percent of all sat navs in Western Europe being sold here. Niche is an opportunity for retailers The market for consumer electronics and photo products was rather troubled in the first half of the year. However, it is clear that particular segments have positive news to report. Above all, manufacturers of highquality, niche technical products are among the winners. For example, there is an increased focus on intelligent software solutions for smart TVs that allow consumers to switch between watching television, surfing the web and listening to music at the push of a button. Connecting smartphones, MP3/MP4 players and tablets with speakers or headphones for a perfect listening experience at home or on the move is increasingly popular. The method Through its retail panel, GfK regularly collects data on TV and video devices, portable audio products, camcorders, hi-fi and home movie systems, in-car electronics, digital cameras, lenses and accessories in more than 90 countries around the world. This evaluation is based on information on the developments of the consumer electronics and photo markets in France, Germany, Italy, the Netherlands, Spain and the UK in the first half of Further information: Jürgen Boyny, , juergen.boyny@gfk.com, or visit our office at the IFA trade fair in Berlin from 31 August to 5 September 2012 (VIP Raum 2, Großer Stern). 4
5 About GfK GfK is one of the world s largest research companies, with more than 11,500 experts working to discover new insights into the way people live, think and shop, in over 100 markets, every day. GfK is constantly innovating and using the latest technologies and the smartest methodologies to give its clients the clearest understanding of the most important people in the world: their customers. In 2011, GfK s sales amounted to 1.37 billion. To find out more, visit or follow GfK on Twitter: Responsible under press legislation GfK SE, Corporate Communications Marion Eisenblätter Nordwestring 101 D Nuremberg Tel public.relations@gfk.com 5
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