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Preview Edition - IFA International

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News The Digital

News The Digital Eco-System Comes of Age Smart TVs and the Internet are market drivers of the future As a “curtain raiser to the IFA”, Dr. Rainer Hecker, Chairman of the gfu, traditionally gives an overview of the various trends affecting the Consumer Lifestyle market. We asked Dr. Hecker how IFA 2012 will reflect the changing face of the global CE and IT businesses, the need to talk up smart TV at retail and the importance of sound in the living room... Dr. Rainer Hecker Chairman of the gfu “(...) When the white goods manufacturers were brought in to IFA, it effectively created what we have now. IFA has become a consumer lifestyle show (...)” [ Interview by R. Barnes ] IFA is following the digitalisation trend, especially in the field of broadcast and the Internet. These two different transmission channels are growing ever closer together, and of course that means the Internet being available on the TV, but also with TV broadcasting, plus the Internet, plus apps, we have the possibility of integrating smartphones and tablet PCs as intelligent remote controls! And that also means connectivity and networking are combined with both the dynamic development of the TV sector and with smartphone and tabletmakers. When talking about interactive advances in TVs, do you think that the manufacturers are getting the message across about the advantages of widgets and apps, or do they need to try harder? They definitely need to push harder. It’s a new challenge for us all, because it’s not only about the TV and the apps in isolation, it’s a new network made up of the Internet plus broadcast plus the apps; and it’s the apps that are the business drivers. It’s a new dimension where intelligent EPGs (Electronic Program Guides) can be developed with input from app-makers, which will create additional benefits and added value for the customer. How do you see 3D developing in the medium term? 3D TV is very important as a factor in decision-making when people are thinking about buying a new TV, but the use of 3D is still very limited. We have 3D games, camcorders etc., but not much film and other content on offer. This will change, but I think that 3D will be just one part of the whole business picture, with smart TVs and the Internet being prime drivers. Audio seems to making a big comeback with ever more high-end products, how do you see the home audio market going in the next few years? I think it will increase, because with a large screen, you need perfect sound, but as screens get flatter and thinner, that makes offering a good sound from the screen unit ever more complex. Therefore you need additional equipment to have the right, and that is what has sparked this revival. What other important trends are you seeing in the market? The biggest growth rates are in smartphones and tablet PCs, much more so than TV. But in fact these devices are all converging, and they will increasingly affect each other. Also at IFA, we have the large field of home appliances, where we have some interesting and very stable trends, including energy efficiency, the lifestyle market, and design. It’s a strong and growing business, with growth this year expected to be between 2-3%. We’re also seeing growth in the wellness and health market, as well as in security and general energy saving. In retail we often see that consumer electronics and home appliances are displayed together. Is that why IFA also does it? Yes, more than 80% of retail space is organised with white and brown goods sitting alongside each other, and our decision to present these two areas of the industry is one of the big success factors behind IFA. When it was first announced, a lot of people were quite surprised. Were you astonished by how well it has worked? Yes, I was indeed. But from the first time we did this, the white goods companies made a huge effort to provide entertainment on their stands, bringing in top chefs and performers, which was a key factor in the successful integration of these product areas. Most importantly when the white goods manufacturers were brought in to IFA, it effectively created what we have now. IFA has become a consumer lifestyle show. 6

News Another Record-Breaking IFA The digital revolution will most certainly be televised! Jens Heithecker, Executive Director of IFA, reveals why so many deals are done at the event, how retailers can get more from their time on the exhibition floor, and what sorts of trends we can expect to see this year… [ Interview by Richard Barnes ] The most astonishing thing that we’re seeing is that IFA is getting bigger despite the global economic situation. We have sold more exhibition space, which means that we are seeing even more investment in the show by the industry, so that’s the first major trend, and it is due to the fact that last year, international trade visitors increased by 50%, plus there was significantly more international media, which makes the current IFA the biggest electronic trade fair in the world. But concerning trends in technology, we now have a ubiquitous digital revolution covering every aspect of life, every area of communication and entertainment, and in every category of home appliances. We have improvements, new products and innovation everywhere, which leads us, in my personal opinion to a ubiquitously connected world. I heard recently that there are already 10 billion connected devices in the world. That’s more than the entire population of the planet, and within eight years, it is expected that there will be 50 billion, which means that being connected is part of every day life. And for the IT and CE industries the challenge is not to deliver the technology, it is to make userfriendly products, which consumers are comfortable with. Consumers don’t buy technology, they buy solutions for their needs. “Retailers should take the time while they are in IFA Berlin to observe the consumers, and watch which brands and products they are reacting to.” Why should media people come to IFA rather than observing the industry at a distance? There are many reasons. September is the most important time for retailers worldwide, the Christmas season is ahead, the industry brings its most innovative products- - ones that are ready to go on sale- -to IFA. There are plenty of other events where you can see new technology, but often you will hear that it will be coming to retail one year later. One who reads an article about the latest products of IFA is able to buy these products a couple of weeks later. This indicates that product related media coverage at this time in September is more relevant than at other times. And although IFA is in Germany, the main language is English, so it’s a global event that attracts global media. What drives so many trade people to come to IFA? Why do distributors, retailers and manufacturers feel that it’s imperative to be at the event? The internet makes it easier than ever to get information and to sort out what´s relevant for a buying decision. When you talk to customers visiting retail outlets, they often know more about the products than the people working there. This means it is a must for retailers to be up to date. IFA is the most efficient place to grab all necessary Jens Heithecker Executive Director, IFA information at once. So it is recommendable to use IFA as a source to study their consumers: which brands and products are they reacting to, what sorts of questions are they asking, etc. IFA can provide really useful insights regarding the “needs and wants” of customers. Jens Heithecker Executive Director of IFA IFA International • Monday 27 th August 2012 7

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