The consumer electronics sector is one which clearly displays the volume versus margin strategic option. Many brands target the highest possible volumes for their low-cost, low-margin products, while others, Bang & Olufsen and Bose being prime examples, focus on achieving the highest possible margins on their relatively low volume sales. Common to both is a need to access the latest innovative technologies – be they automated production techniques or leading edge materials.

It’s true that the industry faces a range of new challenges such as network convergence, broadcasting telecoms integration and robotics but strangely the war for consumer electronics domination is not about technology. Televisions, mobile phone, and microwaves are all increasingly considered to be household items rather than “gadgets”. With this in mind it is design that is the differentiator – which is why places like Taiwan and China, in the past the home of product assembly, are now developing and designing their own products thus adding to the competitive pressure.

As a result brand positioning and recognition is becoming increasingly important, particularly for those companies whose product ranges span the entire consumer electronic spectrum. Samsung, Casio and Nokia have concentrated on building their own brands while others have an alternative strategy and partner with other leading brands to provide innovative joint venture products that connect better with the target consumers. Philips is a good example of this and has teamed up with Alessi for kitchen appliances, InBev for PerfectDraft and, most successfully, Douwe Egberts for the Senseo coffee machine.

The final major area of innovation focus is the convergence between multiple devices and content delivery. Here the push for standardisation and partnership across many different sectors ranging from telecom, banking, retail, consumer products, IT and many others is becoming vital for the success of this industry and its strive to further advance in the home and office environments.