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European consumer electronics market in 9% fall this year

The European market for consumer electronics will probably contract in 2009 by around 9% and reach a total turnover value of €62 billion. This is the first consumer electronics market downturn since the middle of the 1990s, according to market research institute EITO based on GfK data.

“The reason for the fall has less to do with reduced consumer spending as a result of the economic crisis. The switch to digital in consumer electronics has led to strong growth rates in recent years,“ said EITO Chairman Bruno Lamborghini. “However, this process is now nearly complete. In addition, there are no major sporting events this year like the European Football Championship and the Olympic Games in 2008.“

In markets which for the most part have reached saturation, competition will increasingly be determined by prices. In 2009, 95% of the turnover in consumer electronics is being generated by digital products and only 5% by analogue equipment. The digital camera has progressively replaced old photographic equipment, the DVD–Video player the VCR, the MP3 player the Walkman, and the flat screen television the cathode-ray-tube TV.

The contraction of the overall market is to be explained in particular by the decline in turnover for flat screen televisions. LCD and plasma screen televisions account for 43% of the entire CE market. With 42 million sets, there are more flat-screen televisions being sold in the EU than ever before. Yet, according to EITO forecasts, turnover is declining by 10.3%, to €26.3 billion. Turnover is also declining for digital cameras, MP3 players and navigation devices. On the other hand, there is an increase in turnover for Blu-ray players, digital TV set-top boxes and games consoles.

Of the largest EU countries, Spain is recording the sharpest fall in turnover according to the EITO, with minus 1%, to €4.8 billion in 2009. In Italy, the decline is 13% to €5.8 billion and in France, 12% to €8.9 billion. The decline is forecast to be more moderate in Germany – a fall of 7% to €12.5 billion – and the UK where turnover will fall only by 4%, to €12.4 billion.

Story filed 09.05.09

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