Convergence key to market growth

The convergence of IT and consumer electronics technologies is transforming the local channel sector, writes Aaron Greenwood.

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By  Aaron Greenwood Published  September 9, 2007

The introduction of new digital technologies is having a profound effect in terms of reshaping the consumer electronics industry, particularly the distributor and retail sectors.

The influence of traditional IT-based technologies such as wireless networking and mass storage devices is revolutionising the development of new products, from hard-drive equipped televisions and next-generation Blu-ray and HD DVD players, to networked home appliances including washing machines and refrigerators.

This radicalisation is changing the way consumers view products and opening up a host of new commercial opportunities for each player involved in the consumer electronics channel.

In the Middle East, consumers view many of these premium products as aspirational items, which provides distributors and retailers with the opportunity to build healthy margins into retail prices.

The increasing convergence of IT and consumer electronics is also transforming the dynamics of traditional retail sectors catering to both markets.

IT retailers are increasingly eyeing the commercial opportunities provided by diversifying their retail offerings to include consumer electronics goods, while consumer electronics retailers, particularly those in the 'power retail' sector, are increasingly integrating IT products and peripherals - including notebooks - into their product mix.

While the boom in demand for consumer electronics products is set to continue, the introduction of digital television services in the Middle East should prove a watershed moment for the local consumer electronics industry.

While a start date has long been mooted to no avail, the expansion of services in Western markets, particularly in Europe, suggests that Middle East broadcasters will likely follow suit sooner rather than later.

Digital broadcasting will open up a world of commercial opportunities for the local industry, and will serve to significantly coax consumer demand for flat screen displays and peripheral products. It will also positively impact demand for home networking and storage device technologies - a market which is very much in its infancy in the region.

Ultimately, the continued development of these and other digital technologies spells good news for all parties involved in the local consumer electronics channel sector.

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