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Consumer Electronics are booming in Europe

EITO: Strong growth of 9.2% resulting in a market value of € 54.2 billion
Plasma TV, LCD TV and MP3 player sales increase by triple digits

Frankfurt/Main — Innovative devices with digital technologies are leading to a rapid growth of film, music and image-based CE market segments in Western Europe. According to the European Information Technology Observatory (EITO) the market value is growing by 9.2% in 2005 to an overall value of 54.2 billion Euro. “Digital devices are offering a substantial increase in value for the user”, says EITO Chair Bruno Lamborghini. “More storage, higher capacity and better quality in image and sound are convincing arguments for purchase.” Accordingly, digital products like flat screen TVs, MP3 players or game consoles show double digit growth rates. In contrast, the market for analogue products is experiencing a real decline. Cathode ray tube TVs, video recorders or traditional Hi-Fi elements cannot even account for a quarter of the total market.

Highest growth is achieved by MP3 players: with a plus of 98% the market achieves a value of 2.5 billion Euro in 2005. “These devices are very compact and are able to store complete CD collections”, says Lamborghini. In the competition between flat screen TVs and cathode ray tube TVs, flat screen TVs and projectors for the first time have taken the lead this year. According to the EITO, in 2005 the Western European market is growing by 51% to reach a volume of 12.8 billion Euro. At the same time, the market volume of cathode ray tube TVs is shrinking by about 29%, down to only 6.1 billion Euro. Demand is also high this year for game consoles (plus 26%), resulting in a market volume of 2.2 billion Euro.

In spite of strong demand, users benefit from declining prices for digital devices. “In all segments, the market value is increasing less rapidly than the unit sales”, says Lamborghini. The revenues of flat screen TVs, for example, are increasing by 51% while unit sales in Western Europe are growing by 114%, to 10 billion. Manufacturers of MP3 players are expected to sell around 23.6 million units in 2005 — 142% more than in 2004. For digital camcorders, the strong price competition is even leading to a fall in the market volume of 7%, down to 2.1 billion Euro. At the same time unit sales are growing by 12%, to 4.2 million.

According to the EITO, Italy reaches the highest growth rate among the top 5 EU countries in Consumer Electronics With a plus of 13.6%, Italy realises a market value of 6.0 billion Euro in 2005. Double digit growth is also expected this year in Spain (12%) and Germany (11.4%), to reach 5.5 billion Euro and 12.1 billion Euro respectively. At 9.1%, growth in the UK is more moderate. But the technically enthusiastic UK, with 12.7 billion Euro, still accounts for the biggest share of the European CE market. The French market is expanding by 6.6%, achieving a market value of 9.4 billion Euro.

Complementary figures for download are available at:
www.eito.com/tables.html

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