The IFA, the year’s biggest consumer electronics show, is kicking off in Berlin. It comes as the industry – except for TV manufacturers – eagerly awaits the holiday shopping season.
Every time the IFA gadget show rolls around, TVs seem to have gotten bigger, their displays sharper and the colors they project more intense. By now, they’ve reached dimensions that exceed the parameters of any normal living room. This year too, exhibitors will present the latest, state-of-the-art models on the trade fair grounds below Berlin’s iconic radio tower. But they’ll be doing it with a sinking feeling in the pit of their stomachs.
TVs are selling about as well as home theater equipment and digital cameras – that is to say, not very. “The first half of 2015 was worse than we expected, at least for classic consumer electronics,” said Hans-Joachim Kamp, chairman of gfu Consumer and Home Electronics, the organizer behind IFA. “We knew it wouldn’t be a soccer world cup or anything but a decline of 9.3 percent? That caught us off guard.”
Christmas is right around the corner
Sales of high-definition, flat screen TVs alone have collapsed by 16.5 percent to 1.8 billion euros. The television may still be the most used consumer electronic device, but mobile devices are catching up. Business also faltered with stationary IT products like desktop computers. Laptops and tablets are also becoming ever less popular due to the increasing size of smartphones, many of which are also called phablets.
Overall, the industry expects a 1 percent drop in sales by the end of the year. But that’s only if the holiday shopping season goes well. IFA is a fair where orders are made. In 2014, orders worth 4.25 billion euros ($4.79 billion) were placed. How is Germans’ buyer readiness? What are they looking to acquire in the coming months? What will be under the Christmas tree? These are the questions being asked at this year’s IFA.
“IFA is really taking place at the perfect time,” says Hans-Joachim Kamp. Everyone knows that sales really take off in the third and fourth quarters. “That’s when consumers are more willing to buy high-quality goods.” All of the big players are represented at IFA. “Whoever doesn’t come to the trade fair will notice it, at the latest, with the development of their market share.”
82 percent of all connections
More than 1,500 exhibitors are flocking to this year’s fair, which is now completely sold out. Even PC manufacturers, which in years past were more likely to be found at the CeBIT computer show in Hanover, are now coming to Berlin. Incidentally, “IFA” no longer stands for Internationale Funkausstellung, German for International Consumer Electronics Fair. The three letters merely stand for themselves and carry the subtitle, “Consumer Electronics Unlimited.” That last word, unlimited, describes the networking of at-home devices now more than ever. Without an Internet connection, functionality is strictly limited. Only 18 of all devices cannot communicate with the Internet and each other.
People are increasingly turning to the Internet for their movies and music too. Online services for music streaming have grown by 60 percent. There won’t be many new things at IFA this year – it’s much more about introducing the trends of years past in mature form. Christian Göke, head of Messe Berlin, still has high expectations. “The market is on the edge of its seat. The press has already published the first photos, whether they’re of the first smartwatches with round displays or new virtual reality headsets or completely redesigned phablets.”
Not without my smartphone
The lynchpin at this year’s show is the smartphone. Without this communications control center, nothing works. This fact is evident in companies’ sales figures. This year, the telecommunications market overtook that of consumer electronics. More than 11 million mobile phones were sold in Germany in the first half of the year. By the end of the year, this figure is expected to rise to 25 million.
The smartphone is being expanded by so-called wearables, which can include smartwatches or fitness bracelets. “This isn’t just a gimmick. Whoever has one and uses it is typically satisfied,” says Hans-Joachim Kamp. “We would have never thought this possible a year ago, but 1.6 million units will have been sold by the end of this year.”
Heaters, washing machines and robots
A good portion of the trade fair will also be covered by so-called white goods, i.e. washing machines, refrigerators and everything else a household may need. Energy efficiency plays a significant role here. A third of all Germans are ready to exchange their old appliances for new ones that use less electricity. Of course, more appliances are also able to be connected to the Internet. The “smart” home can be controlled via smartphone apps and the clever robot vacuum keeps the place clean even when no one’s home. One cause for concern among Germans, however, remains data security. In this area, convincing solutions are urgently needed.