Consumers - Homing in

Michael Hedges September 3, 2008

Hi-tech manufacturers are homing in on consumers facing tighter budgets. The good news is that media is still in the mix. And it’s nothing your grandmother would recognize.

As Europeans and North Americans tighten their financial belts consumer electronics manufacturers are betting on two trends, if the just finished IFA Berlin show (Internationalen Funkausstellung) is any indication. People, the market researchers believe, will be more focused on efficiency and investing in electronic devices centered on the home. You could say that home bound people and their gizmos and appliances will become more connected…but wireless.  

The most chatter and ink about the IFA show went not to yet another variation on big screen TVs, except for the customs bust at the Hyundai stand. The raves were coming from the white goods section. Yep, let’s talk about refrigerators.

Slovenian appliance maker Gorenje displayed, to the obvious delight of many, a refrigerator-freezer with an iPod dock and speakers in the door. It’s even licensed by Apple (“made for iPod”). Gorenje plans, “in the future,” WiFi enabled ovens and washing machines controllable through the internet via the iPhone. The company is targeting Europe, East and West, and Russia.

Looking for a refrigerator with built-in TV? A Turkish manufacturer displayed one.

State Secretary Peter Hintze, speaking at the IFA, said the government is considering a rebate scheme to encourage consumers to replace old refrigerators and freezers. He said the average German refrigerator is 14 years old. He did not mention the age of the average German television receiver. Skeptics were quick to bring up that the German automobile buyers are also in a pickle as they search for smaller, fuel-efficient vehicles.

The IFA combined white goods with consumer electronics for the first time in the history of the worlds’ biggest display of big and little gizmos. Coffee makers (a very big deal in Germany) competed with the latest, greatest, biggest or smallest TV receivers. Did I mention the refrigerators?

"Among the 10 most important electrical devices for everyday use, five belong to consumer electronics and the other five belong to domestic appliances," said IFA COO Christian Göke.

“I think I will have a happy Christmas, said Sony CEO Howard Stringer. Sony is second to Samsung in world-wide LCD TVs. Speaking to a press gaggle Stringer said he wanted to see TV returned to its rightful place – the centerpiece – of living rooms. That, of course, assumes TV content will be there. Sir Howard, prior to becoming the first non-Japanese to head a Sony division, was president of CBS.

Aside from the super big, super fast and super super television display units on display Philips showed Net TV. Wait! Didn’t Microsoft champion Web TV about a thousand years ago? Wasn’t it dead on arrival?

The Phillips product, not quite consumer-ready, has a gigantic plasma screen and an IPTV chip. All the better for streamed TV or (nearly) instant downloads, my dear. All the better for staying at home, parked on the couch, waiting for the economic storm to blow over.

As analogue switch-off arrives in Germany this year, 46% of households have already switched, said a report presented at the IFA be German media authorities. Cable networks are still the distribution leader, followed by satellite. IPTV’s share of digital TV households is a negligible 0.3%.

“The real challenge of digitalization isn’t the transition to digital technology, said Berlin-Brandenburg Media Authority (MABB) director Hans Hege. “It’s about how new content can be financed.” There’s the word – content – again.

Conveniently – and not coincidentally – the IFA is held during the same week as the annual Berlin Media Week (Medienwoche) where content is nearly always at the top of the agenda, just after license fees and other battles between public and private broadcasters. The BBC Mark Thompson lost his script but not the plot and told conventioneers (September 2) that a multi-platform strategy is  “the only way to fulfill the public service mission.” But ever diplomatic he added that private broadcasters’ concerns are “legitimate and serious.”

Broadcasters, he said, must reach people “any time, every day.” And that would obviously include reaching through refrigerators.

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