What are the drivers and indicators of growth in the consumer electronics sector?
Growth drivers:
- Personal disposable income,
- Consumer confidence,
- Consumer spending,
- Innovation,
- Consumer trends.
Innovation:
- Digital: TV, HDTV, camera, etc.
- NFC: WLAN, Ethernet, Bluetooth, GPS, etc.
- Mobile: Smartphones, Tablets, eBooks, Netbooks, etc.
- Gaming: Wii, etc.
- Software: Mac, Windows, Storage, etc.
Consumer trends:
- Convergence: fixed and mobile (internet and phone)
- SoLoMo: development of mobile-centric version of business publicity and customer loyalty programs
- Social media: Facebook, LinkedIn, Twitter, online gaming
Growth indicators to watch:
- Consumer confidence/consumer spending
- CAPEX and R&D budget allocations
- Unit shipments for mobiles and smartphones
- New releases of electronic equipment and upgrades
- Early cyclical growth rates (exports from South Korea)
Product replacement cycles:
- Mobile: (Smartphones, Tablets, Netbooks, etc): 6 – 18 months
- Software: 1 to 3 years
- PCs: 2 – 4 years
- TV/HiFi: 5 – 7 years
In application:
Which risk profile are concerned? Which investment themes are exposed most? Which is the meaning for my portfolio?
Which risk profile are concerned? Which investment themes are exposed most? Which is the meaning for my portfolio?
- Risk profile: all profiles are concerned, from the very conservative to the very dynamic ones
- Investment themes: In particular these ratios apply most to: Technology, Industry, Energy, European Capex Winners, Emerging Market Exposure as well as Smartphones and Tablets
- Impact to my portfolio: Price fluctuations (positive and negative ones)
Other elements to consider:
- Factory activity
- Jobless claims
- Housing data
- Imports/Exports
- Share of Gross domestic expenditure on R&D
- Broadband penetration rate
- Availability of venture capital
- Patent applications
- Human resources, including schools educating science and technology graduates
Abbreviations used:
NFC – Near Field Communication
SoLoMo – Social-local-mobile