| KN31032 |
| KEY NOTE Household Appliances (Brown Goods) : August 2002 |
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This report covers: video cassette recorders, VCR's, DVD Players, camcorders, cable and satellite systems, portable audio products, audio systems, audio separates, audio receivers, personal computers, televisions, TV's,
Companies covered include: Aiwa, Grundig, Hitachi Home Electronics (Europe),LG Electronics, Matsushita Electric UK, Pace Micro Technology,Panasonic UK, Pioneer GB, Phillips Electronics UK, Samsung, Sharp, SOny,Toshiba,
EXECUTIVE SUMMARY
In contrast to the global market, the household appliances (brown goods) market has achieved steady growth over the past 5 years in the UK. In 2001, Key Note estimates the total market was worth £3.8bn, an increase of 23.3% since 1997. Televisions, satellite systems and digital versatile disc (DVD) players were the sectors showing strongest growth. The subject of this report is 'brown goods', which is the term used to describe a range of electronic entertainment products that include televisions (TVs), video cassette recorders (VCRs), DVD players, camcorders, cable and satellite systems, portable audio products, audio systems, and audio separates. Processes of technological innovation and diffusion are beginning to blur the distinctions between brown goods and other sectors of the electronics industry. Televisions can now be communications devices, mobile phones can also be personal audio receivers and the personal computer (PC) can also be a television.The brown goods industry is going through fundamental structural changes, as a result of the developments in digital technology. Consumer electronics, information technology (IT) and telecommunications are converging rapidly. Companies may retain hardware- and component-manufacturing capabilities, but are spreading their activities into content and service provision and the management of networks. There has also been increased rationalisation within the industry, such as mergers and acquisitions, joint partnerships and a much greater degree of co-operation. The strength of sterling in the past 3 years has been a serious cause for concern for UK-based manufacturers of brown goods. Export markets are more difficult to penetrate with sterling at such high levels, and competition in domestic markets is intensified by foreign competitors taking advantage of the relative weakness of their own currencies.
The development of digital television and radio is expected to drive growth in the brown goods sector forward over the next 5 years, as consumers upgrade televisions, radios and other receiving and recording equipment. However, it is important to recognise that around 40% of the UK population will choose not to subscribe to `Pay TV' and will have to be persuaded to change to digital television. By the year 2006, Key Note forecasts that the value of the UK brown goods market will have grown steadily to just over £4.53bn. This represents a 16.6% increase between 2002 and 2006.
TABLE OF CONTENTS
| 1. Market Definition 7 |
| REPORT COVERAGE 7 |
| MARKET SECTORS 7 |
| Televisions 7 |
| Video Cassette Recorders 7 |
| Digital Versatile Disc Players 8 |
| Camcorders 8 |
| Cable and Satellite-Receiving Equipment 8 |
| Portable Audio Products 8 |
| Audio Systems 8 |
| Audio Separates 9 |
| MARKET TRENDS 9 |
| MARKET POSITION 10 |
| Table 1: Value of Total Products/Services in the UK Electronics Industry (£bn and %), 1995, 1999 and 2000 10 |
| 2. Market Size 12 |
| THE TOTAL MARKET 12 |
| Table 2: The UK Market for Household Appliances (Brown Goods) by Value (£m), 1997-2001 12 |
| BY MARKET SECTOR 13 |
| Televisions 13 |
| Video Cassette Recorders 13 |
| Digital Versatile Disc Players 13 |
| Camcorders 13 |
| Cable and Satellite-Receiving Equipment 13 |
| Portable Audio Products 13 |
| Audio Systems 14 |
| Audio Separates 14 |
| Figure 1: The UK Market for Household Appliances (Brown Goods) by Value (%), 2001 14 |
| 3. Industry Background 15 |
| RECENT HISTORY 15 |
| INDUSTRY CONCENTRATION 16 |
| Table 3: Number of VAT-Based Enterprises Engaged in the Manufacture of Electrical Domestic Appliances by Turnover Sizeband (£000), 2001 16 |
| Table 4: Number of VAT-Based Enterprises Engaged in the Manufacture of Televisions, Radio Receivers, Sound or Video Recording or Playback Appliances and Associated Goods by Turnover Sizeband (£000), 2001 17 |
| EMPLOYMENT 17 |
| REGIONAL VARIATIONS IN THE MARKETPLACE 17 |
| DISTRIBUTION 17 |
| HOW ROBUST IS THE MARKET? 18 |
| KEY TRADE ASSOCIATIONS 18 |
| British Federation of Audio 18 |
| British Radio and Electronic Equipment Manufacturers Association 18 |
| Federation of the Electronics Industry 19 |
| The Institution of Electrical Engineers 20 |
| 4. Competitor Analysis 21 |
| THE MARKETPLACE 21 |
| MARKET LEADERS 21 |
| Table 5: Selected Leading Companies in the UK Household Appliances (Brown Goods) Market by Turnover (£m), 2000/2001 21 |
| Aiwa UK Ltd 22 |
| Company Structure 22 |
| Current and Future Developments 22 |
| Financial Results 22 |
| Grundig UK Ltd 23 |
| Company Structure 23 |
| Current and Future Developments 23 |
| Financial Results 23 |
| Hitachi Home Electronics (Europe) Ltd 23 |
| Company Structure 23 |
| Current and Future Developments 23 |
| Financial Results 24 |
| LG Electronics UK Ltd 24 |
| Company Structure 24 |
| Current and Future Developments 24 |
| Financial Results 24 |
| Matsushita Electric UK Ltd 24 |
| Company Structure 24 |
| Current and Future Developments 25 |
| Financial Results 25 |
| Pace Micro Technology PLC 25 |
| Company Structure 25 |
| Current and Future Developments 25 |
| Financial Results 26 |
| Panasonic (UK) Ltd 26 |
| Company Structure 26 |
| Current and Future Developments 26 |
| Financial Results 26 |
| Pioneer GB Ltd 26 |
| Company Structure 26 |
| Current and Future Developments 26 |
| Financial Results 26 |
| Philips Electronics UK Ltd 27 |
| Company Structure 27 |
| Current and Future Developments 27 |
| Financial Results 27 |
| Samsung Electronics (UK) Ltd 27 |
| Company Structure 27 |
| Current and Future Developments 28 |
| Financial Results 28 |
| Sharp Electronics (UK) Ltd 28 |
| Company Structure 28 |
| Current and Future Developments 28 |
| Financial Results 28 |
| Sony UK Ltd 28 |
| Company Structure 28 |
| Current and Future Developments 29 |
| Financial Results 29 |
| Toshiba Electronics (UK) Ltd 29 |
| Company Structure 29 |
| Current and Future Developments 30 |
| Financial Results 30 |
| OUTSIDE SUPPLIERS 30 |
| The Chemical Industry 30 |
| Electronic Component Manufacturers 30 |
| Advertising and Promotion 31 |
| Table 6: Main Media Advertising Expenditure on Brown Goods by Product Sector (£000), December 2000 and 2001 31 |
| Table 7: Main Media Advertising Expenditure on Loudspeakers (£000), December 2000 and 2001 33 |
| Table 8: Main Media Advertising Expenditure on Stereo/Hi-Fi Systems (£000), December 2000 and 2001 33 |
| Table 9: Main Media Advertising Expenditure on TV Sets and Satellite Systems (£000), December 2000 and 2001 34 |
| 5. Strengths, Weaknesses, Opportunities and Threats 36 |
| STRENGTHS 36 |
| WEAKNESSES 36 |
| OPPORTUNITIES 36 |
| THREATS 37 |
| 6. Buying Behaviour 39 |
| CONSUMER PENETRATION 39 |
| Television Set Ownership 39 |
| Table 10: Number of Televisions Owned per Household (000 adults and %), 2001 39 |
| Table 11: Penetration of Televisions (000 adults and %), 2001 40 |
| Video Recorders/DVD Players 42 |
| Table 12: Number of Video Recorders/DVD Players per Household (000 adults and %), 2001 42 |
| Table 13: Penetration of Video Recorders/DVD Players (000 adults and %), 2001 43 |
| Video Usage 44 |
| Table 14: Use of Video Recorders (000 adults and %), 2001 44 |
| Satellite/Cable/Digital TV 45 |
| Table 15: Penetration of Satellite/Cable/DVD Players (000 adults and %), 2001 45 |
| 7. Current Issues 46 |
| OFCOM (OFFICE OF COMMUNICATIONS) 46 |
| DIGITAL TELEVISION 47 |
| ITV Digital Disaster 47 |
| DIGITAL RADIO 49 |
| INWARD DIRECT INVESTMENT 50 |
| RESEARCH AND DEVELOPMENT 51 |
| INDUSTRIAL AND TECHNOLOGICAL CONVERGENCE 52 |
| Table 16: Total Internet Users in the UK (million), 1999-2001 52 |
| 8. The Global Market 55 |
| THE TOTAl market 55 |
| GLOBAL TRENDS 55 |
| 9. Forecasts 57 |
| FUTURE TRENDS 57 |
| FORECASTS 2002 TO 2006 58 |
| Table 17: The Forecast UK Market for Household Appliances (Brown Goods) by Value (£000), 2002-2006 58 |
| 10. Company Profiles 59 |
| Grundig UK Ltd 60 |
| Hitachi Home Electronics (Europe) Ltd 62 |
| Pace Micro Technology PLC 64 |
| Pioneer Gb Ltd 66 |
| Toshiba Electronics (UK) Ltd 68 |
| 11. Further Sources 70 |
| Associations 70 |
| Publications 71 |
| Directories 73 |
| General Sources 73 |
| Bonnier Information Sources 74 |
| Government Publications 75 |
| Other Sources 76 |
Text © 2002 Key Note
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Last updated by Amanda Porteous February 2004