Mood Optimistic at Consumer Electronics Show

A hi-fi garden chair and a cycling jacket with a built-in kidney warmer may not be at the top of everyone's wish list, but they are among the latest developments in consumer electronic that will be on display at the International Broadcasting Fair (IFA) in Berlin.

Manufacturers of such home electronic wizardry hope that excitement about these products, along with more mainstream offerings like flat-screen televisions and DVD players, can help turn around a sector that has experienced two years of stagnation.

This year, 1,007 exhibitors have signed up for the biannual show that is divided into six sections covering the whole range of consumer electronics, from audio systems and broadcasting technology to video, digital imaging and mobile telecommunication.

The star of the show this year is expected to be the flat screen television as manufacturers introduce visitors to their latest LCD and plasma sets. Hard disc recorders, billed as the future of the VCR, will be prominent along with digital interactive TV and the next generation of DVD players.

Interactivity is playing big this year, with manufacturers touting refrigerators that can tell your TV that the door is open, or windows that can be closed by remote control. If that remote control has gotten too complicated, one German company is introducing a version with clearer labels--instead of volume, the button reads "loud" and "quiet." The company hopes the device will appeal to older consumers.

Better times ahead?

The IFA has a long history behind it, having made its debut in Berlin in 1924. In the past enthusiasm about it offerings has helped spark business turnarounds, and industry officials say they have cautious optimism that this year it can do the same.

"Luckily the business climate has stabilized somewhat. We're confident," said Hans-Jochen Kamp, head of the consumer electronics unit of the German electronics industry federation ZVEI. "Our optimism is based on the variety of innovative products and solutions that will be presented here at the IFA."

The IFA does provide an important platform for business. At the last fair in 2001, exhibitors booked orders in excess of €2 billion. The show attracted 370,000 visitors, including 133,000 experts and business executives from around the globe. But cost-cutting measures have led organizers to cut the fair to seven days from ten, which could cut down on the number of visitors this year.

Over he past two years, the sector has been hurting, especially in Germany, where the consumer electronics industry watched turnover fall from €20.4 billion ($22.24 billion) in 2001 to €19.1 in 2002. The decline has continued into this year.

Recent sparks of optimism among business leaders throughout the euro zone have, unfortunately, not translated into increased consumer confidence. Retail sales have been sluggish.

But some industry analysts are saying the economy may already have scraped bottom and that modest growth is on the way. Germany's consumer electronic federation is predicting revenues this year will rise 1.4 percent to €19.3 billion.

The IFA runs from August 29 to September 3.