The show floor of CES 2013, where the electronics industry shows off its latest advancements. But most companies here are at high financial risk.
14 NOVEMBER 2013
Samsung Electronics and Apple are dominating the sales and profits from most of the world’s electronic consumer goods, leaving the rest of the electronics industry with weak finances.
In fact, with the electronic consumer goods industry itself maturing, Samsung and Apple face slower growth. Some criticize it is time for strategic changes other than revolutionary products.
On November 13, a global business consulting firm Alix Partners wrote such analysis in the “2014 Global Consumer Goods Electronic Products Forecast” report revealed at the Seoul Finance Center in Jung-gu.
Alix Partners’ TMT Department Asia Leader and Seoul Branch Representative Jeong Young-hwan said, “The electronic consumer goods industry is a mature one, and the endless growth is almost over,” and added, “Businesses will now face intense competition and difficulties as did other mature industries so far.”
In the report, Alix Partners stated, after analyzing the finances for the past three years from 59 electronic businesses listed around the world, 56% of them (32 companies), excluding Samsung and Apple, are already facing weak finances or will in the near future.
These businesses make up 88% of the sales in the electronics industry without Samsung and Apple.
In fact, some of the leading second tier businesses following Samsung and Apple, such as Panasonic, Sony, LG Electronics, and Sharp, are at high risk of financial difficulties.
These four made up 70% of sales in the second tier groups, but half the profits. They have been criticized for weakened profitability. Other businesses in the second tier other than these four are hanging in there.
In addition, Alix Partners pointed out that both Samsung and Apple are also having hard times maintaining the growth and profit they once experienced in the past. Extremely shortened cycles of products and technologies, and global reduction in electronic product demands, are burdening these two companies.
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