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issue: January 2005 APPLIANCE Magazine

Appliance Industry Association Forecasts - Consumer Electronics Association
A Bright Future Beckons

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by Gary Shapiro, president, Consumer Electronics Association (CEA)

I am proud to be part of an industry that not only is exciting and dynamic, but also profoundly shapes the world with its products and technologies. We’ve redefined work and play. And we’ll continue to lead the way to fulfill demand for more access to information, entertainment, and education for people around the globe.

Gary Shapiro

We see a promising future ahead. And we see the Consumer Electronics Association (CEA) and the International CES™ as major drivers of the businesses that will be created.

Today, the consumer electronics market is a bustling U.S. $100-billion plus industry—one of the shining spots in the U.S. economy. Industry growth mirrors CEA’s own dynamic rise to one of the nation’s 20 largest associations. We have more than 1,750 corporate members that represent the entire range of the CE industry. In the past 3 years, CEA’s membership has tripled.

Although we are best known as the producers of the International CES trade show, CEA works to grow the industry through technology policy, events, research, and promotion and helps to nurture business and strategic relationships all year long. Whether it’s protecting industry positions on copyright, digital television, broadband, spectrum management, plug-and-play, or connectivity issues, CEA works to ensure that consumers can buy and enjoy our products. CEA has helped create consumer markets for HDTV, satellite radio, wireless products, and many other emerging product categories.

As digital technology continues to fuel the industry, in particular DTV, digital radio, portable audio, cameras, and phones, our products are getting quicker, smaller, faster, and cheaper. We are seeing rapid growth in home networks, photography, navigation, LCD, plasma, and digital radio. Sensing devices, broadband, and wireless will help to define our future. In 2004, our industry will ship approximately $109 billion of product, a 5-percent gain over 2003. And the year ahead promises even more growth, with factory shipments of CE products in 2005 expected to top $116 billion.

As an industry, the challenge we face with our success is to continue to innovate. The success of HDTV gives us a model to follow. We see new opportunities coming like prerecorded HDTV, the next-generation of HDTV 1080P, the beauty of flat HDTV, and large LCD, plasma, and new display technologies with paper-thin visual displays. More, we are seeing a wave of products arriving in the wake of the marketplace success of DTV-new audio products that match the cool form factors of new video displays, recordable HD products, HD playback devices, and an array of accessories for new digital home theaters.

Although the industry is growing, we face challenges. We face economic uncertainty and concerns about terrorism. And we face issues unique to the CE industry such as content protection, product recycling, and broadband availability. Our industry also relies heavily on new technology launches to sustain growth. Further, the triple threat of consolidation, confusion in the market, and commoditization challenge the industry.

We need to find inventive business solutions to boost profits as competition intensifies, new manufacturers enter the market, and prices fall. And we must create products that simplify consumer’s lives, not complicate them further.

We also are challenged by the need to strike a balance between protecting intellectual property while preserving fair use and home recording rights. To preserve that vital balance, CEA works with the Home Recording Rights Coalition (HRRC), which has been protecting the legitimacy of technology and the recording rights of consumers for more than 20 years. Together, we fight to ensure that the shift to digital content does not take away consumers’ established fair use rights.

The good news is that consumers are finding compelling reasons to buy the latest digital products. Shifting content in time and place plays an ever-larger role in driving the sales of these devices. Consumers want to be able to take their information, entertainment, and communications with them anywhere—whether that is from room to room at home or on the road. As broadband penetration increases, our products will proliferate, and the rate of innovation will soar making me very optimistic about our future.

Our industry makes and sells the cutting-edge products that help us stay connected, informed, and entertained. We see a bright future with our products everywhere as we advance toward the $108-billion marker.


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