Supply chain
The future of the industry: By consumers, for consumers
Sponsored content
Friday 13 July 2012

Twenty years ago, technological innovations were driven by demand from large companies, governments and the military. Today, the world is led by consumerism, and meeting consumers' needs has become the reason for all innovations.

According the organizer of IFA noted that the debt crises in Greece, Spain and Ireland cannot be seen as an economic crisis of the whole Europe, which remains one of the biggest consumer markets of the world. To understand the trends of this consumer market, one needs to understand Berlin, the mainstay of the European economy and finance.

Industrial innovation directed by consumers, instead of enterprises

Jens Heithecker, Executive Director of IFA, gave a speech on why the consumer is the decision-maker for the industry's future. He pointed out the first rule of the industrial innovation nowadays is "consumerization." Marc Andreessen, founder of the venture capital firm Andreessen Horowitz, shared his view about consumerization. Andreessen said that many exciting developments of IT technologies first appear in the consumer market before heading towards other areas. Companies also provide personalized devices.

Heithecker said that in the 1990s, industrial innovations were meant to meet the demand of large companies, research centers and the military. With the rise of Internet, the situation has gradually changed, with innovations intended more for consumers. Now it is an age of individuals, and innovations are starting to be first inspired and guided by consumers' needs before finding their own ways into enterprises and governments.

He cited two IT giants as illustrations: Microsoft and Apple. Microsoft thrived in the 1990s because the company provided innovative technologies to fulfill demands of enterprises. But Apple's high market value and wide influence in 2012 has come from the fact that its innovations have always been meant for consumers.

The market trend has also turned from traditional PCs to mobile Internet devices. The Economist remarked in 2011 that the Wintel era, dominated by PCs running Microsoft Windows and Intel chips, was drawing to a close.

According to various market research done by enterprises, investment companies or governments, from 1981 to 1993, there were 100 million PCs in the world. By 2008, the number had grown to one billion. It is expected that by 2020, there will be 10 billion Intrernet-connected mobile devices in the world.

That leads us to the second rule of industrial innovation: "mobility." The Economist mentioned in 2011 that society is changing with more and more people trusting or even relying on online shopping and activities on social networks, and they are looking to access these Internet services and computing capabilities from more locations.

A new high-tech environment of mobility has begun taking shape. Heithecker emphasized that it is not just those computing capabilities, services, mobile sites and apps that should be made available on the Internet. Content and personal data should also be accessed anytime, anywhere on any devices. Mobility means "ubiquitously connected."

The IFA showcase of the 'ubiquitously connected world' for consumers and by consumers

Heithecker further stressed that in this present era, everything is "for consumers" and "by consumers." The IFA exhibition opens every year from late August to early September in Messe Berlin, gathering manufactures and traders of consumer electronics from all over the world to showcase their latest products and technologies.

IFA attracts thousands of buyers, local citizens and personnel from local and international media establishments. Not only mobile devices are shown at IFA; there are also all kinds of digital gadgets, including smart TVs and intelligent home appliances that form an ubiquitously connected life.

During IFA 2011, 38,569 international buyers (56% Y/Y growth) visited the exhibition. The fair attracted 2,181 foreign press people (16% Y/Y growth) and 6,189 local ones (2% Y/Y growth). A total of 1,441 companies (1% Y/Y growth) exhibited at the show.

IFA offers a large indoor space at 28 exhibition centers/halls. There are seven areas:
*Home Entertainment: Hall 3.2, Hall 4.2, Hall 5.2, Hall 6.2b, Hall 7, Hall 8, Hall 10, Hall 11, Hall 18, Hall 20, Hall 21, Hall 22, Hall 23 and Hall 25
*Audio Entertainment: Hall 1.2, and Hall 2.2b
*Home Appliance: Hall 3.1, Hall 4.1, Hall 5.1, Hall 6.1, Hall 7.1, Hall 8.1, and Hall 10.1
*IFA My Media: Hall 13, Hall 14, Hall 15, Hall 16, Hall 17, and Hall X19
*Public Media: Hall 2.2a, and Sommergarten plaza
*IFA Communication: Hall 6.2a, and Hall 9
*Technology & Component: Hall 5.2, Hall 11.1, Hall 26, Hall 27, and Hall 28

People may wonder: since IFA is at the heart of Europe, which is being hit by an economic crisis, what benefits may there be to join the show? Heithecker noted that only three European countries are heavily influenced by the debt crisis, namely Greece, Spain and Ireland, and their situations cannot be seen a crisis of the entire continent.

According to statistics, in 2011 Europe was the largest market of consumer electronics with a share of 27%, and it will remain number one through the end of 2012. China accounted for 22%, the US for 21%, Asia-Pacific for 13%, Latin America for 11%, and Africa and Middle East for 6%.

According to statistics and estimation provided by World Bank in 2011, German, France, the UK, Italy and Sweden saw their GDP decrease 3-5% in 2009, while the global GDP dropped 2.3% on average. Eastern Europe was in a more difficult situation where countries there saw GDP decrease 4-14.5%, except for Poland, whose GDP grew 2%. In 2010 and 2011, Italy had only a 0.5% growth, but most other Western European nations recovered with 1-5.5% growth, while Eastern European countries had 1-7% growth.

Heithecker said all IFA booths this year have been booked up. As the most important trade event of consumer electronics in the world, IFA 2011 achieved orders up to US$4.8 billion, and attracted more international media attention than ever. IFA 2012 takes place from August 31 to September 5 in Berlin.

Jens Heithecker, executive director, IFA

Jens Heithecker, Executive Director, IFA

DIGITIMES' editorial team was not involved in the creation or production of this content. Companies looking to contribute commercial news or press releases are welcome to contact us.

© DIGITIMES Inc. All rights reserved.
Please do not republish, publicly broadcast or publicly transmit content from this website without written permission from DIGITIMES Inc. Please contact us if you have any questions.