The World Watching Warily: Electronics Manufacturers Try to Gauge U.S. Consumption

The World Watching Warily: Electronics Manufacturers Try to Gauge U.S. Consumption

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What sells best in lean times? Will the confidence of U.S. shoppers rebound along with the stock market? What’s the likeliest gadget demand scenerio for 2009?

In uncertain economic times, attendees at the Hong Kong Electronics Fair (Autumn Edition), the world’s second largest consumer electronics show, spent the last week grappling with questions about how the tech sector may fare over the next few weeks and years. Though 2610 exhibitors were still manning bright, blinking, flower-festooned booths in a business-as-usual fashion at the show, which ran from October 13-16th at the Hong Kong Convention and Exhibition Centre, many admitted they were concerned about a potential drop in exports to the U.S. in particular.

“No one country is an island anymore,” said Kurt Schraudy, an executive at Messe München International. “The U.S. is still the #1 market for consumer electronics and if people there stop buying their DVDs and laptops or putting off automobile sales, China will certainly be affected, especially South China, which makes components.”

Professor K.B. Chan, a spokesman for the Hong Kong Electronic Industries Association, said Chinese factories were already operating with some hesitancy, fearing a slow-down in demand that could hit hard next year.

“It’s a matter of confidence,” said Chan. “Consumers have been living day-to-day lately, and that’s not good for long orders. Factories are afraid they’ll be stuck with goods. They are afraid Wal-Mart will say, ‘Hold your shipment.’”

Chan predicted slow growth in the CE industry over the next five years as a result of the international liquidity crisis (“Never mind about the stock market,” he said. “The real problem is available credit.”), and he thought the category which may suffer most would be HDTV. But Chan, as well as many buyers, felt that sales of mobile and hand-held devices and complimentary accessories could stay strong throughout the downturn.

“People all over the world will continue to look for simple, effective technology no matter what,” said Igor Glotov, a wholesaler. “Cellphones, GPS systems, any handheld multipurpose device should sell well. We’ll see what happens over the next 2-3 months. We’d be God if we knew.”

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