Consumer Electronics, or CE, seems to be a hot area for field service technicians these days. The volume of warranty repair work for this niche, which includes the installation, maintenance and repair on items such as home theater, security systems and HDTV displays seems to be rising and, according to the OnForce Services MarketPlace Index for Q3 2008, released last month, this area pays some of the highest hourly rates in the industry.
This makes sense considering that the market for many CE products hasn’t peaked and is not likely to do so in the near term. Considering that new products in this category are constantly being introduced to the marketplace, that is no surprise. What is surprising is the fact that the service business in this area remains strong in spite of the downturn in the economy – at least for now.
Why? You would think that with the financial woes the consumer is facing such as bank failures, rising unemployment and tight credit that the little luxuries of life – the big flat screen TVs, wireless devices, security systems and the like – would be the first thing consumers would cut back on in favor of more basic necessities such as food, fuel, clothing and shelter.
Apparently, such is not the case. Why? Are we, as consumers, in a state of denial? Are we so addicted to technology that our priorities are misplaced? Or is it because we have become so dependent on technology that these products are no longer merely a luxury for diversion, but a necessity for daily living?
Perhaps the correct answer is D – all of the above.
The current recession is indeed somewhat depressing and no doubt there are many who try to ignore it to protect their interests and their sanity. Also, we have more than one generation that subscribes to the concept of materialism and craves the latest and greatest inventions on the market. Then there is the dependency factor. Some of it is sublimely market driven, but to some degree it can be forced upon us.
Take the HDTV displays, for instance. According to OnForce, service calls for HDTV LCD and plasma displays are up and are expected to remain steady through the next year. There are several reasons for this. First, these displays are now less expensive than they were even six months ago. As the prices drop, sales rise. Second, the market for these displays has not reached saturation. CRT displays are still being phased out and millions of households are yet to adopt flat panel displays.
Third, and most significant, is the government mandate that all TV broadcast signals go digital by February 17, 2009. After that, anyone who is still watching TV on an analog Cathode Ray Tube will be watching snow. We all know how much fun that is. So, if whether we want our MTV or to keep up with the local news and weather, we are basically being forced to upgrade. Isn’t government wonderful?
So, yes, there are a number of reasons why the consumer electronics market is still relatively stable and why CE installations, maintenance and repairs are hot. How long this will last is anybody’s guess. I would imagine the trend would continue at least until the current demand for items such as HDTV displays reach a tipping point.
Whatever the reasons, if you’re in the IT service business and things are a little slow, perhaps you should look into CE as another source of revenue, especially during these difficult economic times.
