Industry Overview: Consumer Electronics

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Posted by The Editors on December 3, 2012
Overview

The consumer electronics industry manufactures and distributes everything from telephones, stereo components, televisions, alarm clocks, and calculators to digital cameras, video cameras, VCRs, and DVD and MP3 players-basically, everything you see when you go into a Best Buy or Circuit City store. (Some industry observers also include desktop and laptop PC manufacturers as part of the industry.) Needless to say, consumer electronics is big business. In 2005, in the U.S. alone, consumers spent more than $75 billion on consumer electronics products, 8 percent more than in 2004.

The industry employs a host of engineers, designers, marketers, salespeople, customer service reps, and finance gurus to continually improve familiar products as well as come up with the next big must-have gadget. Although much of the actual manufacturing of consumer electronics products is done in Asia and other low labor-cost locations, there are many career opportunities in the industry in the United States. On the technical side, opportunities exist for software and electronics engineers, quality assurance engineers, industrial designers, manufacturing design engineers, and IT professionals. If you're a people person or if you can design a marketing campaign, close a distribution deal with a major retail chain, write marketing copy, or help a confused consumer understand a complex product, consumer electronics companies may be good places for you, too.

You can earn your stripes at a multinational corporation like Samsung or Mitsubishi, where big money backs big products such as high-definition television (HDTV) and smart phones (mobile handsets with advanced operating systems and powerful processors). Or you can try your hand at a startup that's pushing the consumer-electronics envelope in one market niche or another. So before you start your job search, think about whether you like the structure and resources (and bureaucracy) that a big organization will have or prefer the flexibility and cutting-edge spirit (and bare-bones budget) of a younger, smaller company.

Job seekers should also keep in mind that many consumer electronics products are global brands, so many companies have opportunities for international positions and travel, and foreign language skills are often highly desirable. And in the United States, though there is some concentration of consumer electronics jobs on the East and West Coasts, the industry is sprawled across the country. Many of the large companies have multiple offices to choose from, with each location housing a different product line or corporate function.

Convergence
With each passing year, and each new generation of products introduced in the marketplace, it's getting harder and harder to pigeonhole companies and their products into traditional categories like telecommunications, computer hardware, and consumer electronics. Consider cell phones: These days, cell phone users can use their phones to do everything from take digital photographs and send and receive email to surf the 'Net, download and watch videos, and transmit their geographic location via global positioning system (GPS) technology. You tell us: Should cell phones that do all that be called consumer electronics products? Telecom products? Computer hardware products?

One result of convergence is that players in the consumer electronics, computer hardware, and telecom sectors are increasingly finding themselves competing head-to-head to determine who will lead in brand-new product categories such as Internet-connected cell phones. Turmoil, in the form of mergers and acquisitions and fluctuations in profitability, is likely to result in each of these industries as time passes.

Falling Prices
These days, because so many consumer electronics products rely on semiconductors for their functionality, Moore's Law, which states that semiconductor speed doubles every 18 months, applies just as much to the consumer electronics industry as it does to computer hardware. Because of this, consumer electronics companies are developing new and improved products all the time. If you're one of the many consumers who need to have the latest and greatest gadgets, it's going to cost you a pretty penny to stay on the cutting edge. But if you don't need top-of-the-line consumer electronics products-if you're happy with getting a 4-megapixel digital camera, for instance, and are prepared to leave the 8-megapixel camera to the hardcore gadget-heads-just wait a little while, and the price on the product that's right for you will almost certainly decrease substantially.

Cool New Products
As usual in consumer electronics, these days there are a number of cool, new products on or about to reach electronics store shelves. For instance, to take advantage of the improved sound offered by digital radio, many of the big electronics makers are bringing digital home and car radios to market. Digital cameras, meanwhile, are increasingly likely to include significant digital video recording capability. And there are refrigerators on the market with TV screens embedded in them, which you even can use to surf the 'Net. Satellite TV in your car; satellite radio systems that give you live, up-to-the-minute reports on traffic conditions; handheld media-storage devices; live TV on your cell phone-the list of innovative new consumer electronics products already on or about to hit the market goes on and on.

Intellectual Property Confusion
Since the first big digital consumer product, the audio CD, hit the market in the early 1980s, nothing has slowed the digital juggernaut, with one exception: worries about piracy-of music and, more recently, of movies. Such concerns delayed the introduction of writable CD equipment (and digital audiotape); the spread of the MP3 format for recording music and exchanging it via the Internet is giving the music industry fits. When Napster came on the scene, media consumers had the advantage over the entertainment industry, which feared for its massive profit-making ability. Nowadays, after fighting back (by cutting deals with computer and electronics makers to get them to include copyright-protection features in their products; by attacking file-sharing software makers; by suing downloaders and the ISPs that serve them), it seems that the entertainment industry has the upper hand again.

Who Controls the Digital Home
Televisions, stereos, cameras, and other consumer electronics products grow more useful and powerful when they are tied together wirelessly and can reach out to the Internet. For the digital home to take shape and for sales to soar as consumers see its advantages, companies need to figure out how to get all their gadgets talking to each other and to a central hub that will store the many megabytes of media files that entertain us. Microsoft wants the computer in the middle and is pushing its Media Center software; Sony is selling a portable LCD television that can grab video from the Internet, a personal video recorder, or a DVD player; and Sharp will launch technology for sending HDTV signals through a home's existing electrical wiring. No matter which arrangement proves popular, there should be plenty of work in turning today's homes into tomorrow's networked entertainment centers.

The consumer electronics industry includes manufacturers of all shapes and sizes. The largest are multinational conglomerates with more than 100,000 employees and interests in many different industries. The smallest often have only one office with fewer than 50 employees focused on one product. In the middle are manufacturers that offer a range of products within a certain category, such as speakers and audio accessories. Because companies of all sizes can make similar products, industry observers usually break down the market by product category rather than company size.

Video
These days, all eyes are on video. As the switch is made from analog to digital technology, the market is quickly expanding beyond traditional televisions, DVDs, and camcorders to include flat-screen and high-definition digital televisions, personal video recorders (PVRs), elaborate home theater systems, home satellite systems, set-top Internet access devices designed to bring interactivity to the television, and cell phones and other handheld devices that can download, store, and play video. Key players include Matsushita (Panasonic), Philips (Magnavox), Sony, Thompson (RCA), TiVo, and Microsoft (WebTV).

Audio
Vinyl may be the latest retro resurgence, but it can't stop the digital wave. Consumers can now choose from CDs, DVDs, MiniDiscs, MP3s, and proprietary digital formats from the likes of Apple and Sony to get digital-quality sound. The proliferation of digital formats is also driving new demand for upgraded home theater systems, multimedia PCs, car stereos, and portable players. Key players include Bose, Harman International, Sony, and Toshiba.

Mobile and Wireless
Mobile electronics and wireless technology have transformed communication. Better technology and lower prices have turned high-end products like cell phones and pagers into commodities sold out of street-side kiosks. And broad market demand is fueling the race to develop the next generation of smart phones and wired PDAs, which will use high-speed wireless networks to transmit voice and data. High-end car audio, security, navigation, and multimedia systems manufacturers are also taking advantage of the new digital technologies and making inroads in the mass market. Key players include Motorola, Nokia, and Samsung.

Integrated Home Systems
Picture this: While sitting at your computer at work, you pull up the website for your home, check out the live video feed to make sure your new puppy isn't devouring the muffins you forgot to put back in the cupboard this morning, click a link to preheat the oven for dinner, and turn up the thermostat to warm the house. This is the smart home. Smart homes are powered by integrated home systems-electronic products that are networked together and connected to the rest of the world via the Internet or wireless technology. Players in this fledgling market include IBM, and appliance manufacturers such as Sunbeam and Whirlpool are joining the fray by experimenting with products that are network-friendly.

The U.S. Bureau of Labor Statistics expects the number of jobs in this industry to shrink by some 7 percent between 2004 and 2014, as compared to a 14 percent increase in the number of jobs overall during that period. But the reality here is that job prospects will vary tremendously depending on the specific industry segment you're looking to work in and the specific career you desire.

If you work in hot growth sectors, like wireless devices, you'll probably be faced with many employment opportunities in the coming years. But the outlook won't be so good in more mature sectors (e.g., household audio, where PCs and MP3 players are increasingly taking the place of traditional home stereo systems).

Because of increasing automation and outsourcing, production jobs and customer service jobs will probably not have a great outlook in coming years. But electrical engineers, technicians, and others involved in designing and testing the ongoing flow of new products being brought to market will face much better prospects.

A key to ongoing success in your career in consumer electronics will be an ability to think about the ways in which digital content, piracy protections, the design of an electronic product, and available networking technology can interact to produce something that is truly entertaining and flattering to use. Ladies and gentlemen, find the next iPod!

Life on the Cutting Edge
Working in the consumer electronics industry is a gadget lover's dream come true. Whether you're in engineering or sales, you'll have the inside scoop on this year's hottest product and next year's new technology. You may even like bringing your work home with you-if it means doing a little market research on the competitor's home theater system or beta testing a new video game console.

Agents of Change
The world was different before television. It was different before radio, before cell phones, and before CD players. And it will change again with the advent of smart homes, smart cars, and smart phones. By changing the way people communicate, share information, and entertain themselves, consumer electronic products become a part of the culture. For the people who create these products, it's a powerful feeling to see your work shaping how people interact and communicate every day.

Mobility
The consumer electronics industry is big and diverse; behemoth conglomerates and tiny start-ups coexist on almost every continent. But all of these companies use similar technology to develop similar products that are targeted to similar consumers. For the job seeker, this means that the skills you develop at one company will be valuable at many others.

Headache Technology
Engineers spend a lot of time debugging, and though they catch most of the glitches, it's difficult to catch them all. At the same time, today's level of competition has shortened design cycles and reduced testing time. So when a bug doesn't raise its ugly head till it's comfortably entrenched in several million living rooms, headaches arise not just in the engineering lab, but in marketing, sales, and, especially, customer service.

Luxury Industry
Let's face it: A new gadget is not exactly a life-or-death purchase; it's a luxury. This means that the consumer electronics industry is inherently tied to the strength of the overall economy, both domestically and abroad. If consumers' disposable income dries up, most consumers will be quick to realize which products they truly need-medicine, housing-and which they merely want. The resulting slowdown in sales can trigger layoffs at big and small manufacturers alike.

Cog in a Very Big Wheel
The top executives in this industry don't spend all their time thinking about consumer electronics. The consumer electronics divisions of Hitachi, Matsushita, Mitsubishi, Philips, Sony, Samsung, and others are just small parts of empires that can include cars, movies, turbines, missiles, and nuclear power plants. At these enormous conglomerates, the view from the bottom of the corporate ladder can be daunting, and your work may sometimes be lost in the crowd.

Inventing, designing, building, manufacturing, distributing, and selling consumer electronics is a big business that requires lots of people with lots of different skills. On the technical side, engineers and product designers will find opportunities in hardware, software, and systems. On the business side, this industry employs marketers, customer service professionals, and operations specialists.

Software Engineer
Manufacturers of digital television systems, home automation systems, video games, personal digital assistants, and other products need software engineers to write the code that makes their products work. Most positions require a BS in computer science or electrical engineering; experience in real-time, embedded software development is helpful. Salary range: $45,000 to $90,000.

Hardware Engineer
Electrical engineers design the products and their components, and are involved with everything from layout and prototyping to manufacturing and quality control. People in these positions have a BS or Master's in electrical engineering, mechanical engineering, or computer science. Salary range: $40,000 to $85,000.

Senior Engineer
Once they've put in time in the trenches, engineers can move into more managerial roles, such as leading a project team or division as the head architect of a particular product. These senior roles combine technical expertise with a wider range of responsibilities including team building, budget and resource management, long-range planning, and coordinating with other divisions. These people have strong organizational, communication, and leadership skills in addition to several years of experience and the requisite engineering degrees (BS required, Master's or PhD preferred). Salary range: $60,000 to $120,000.

Marketer
Marketers are the people who convince consumers to buy consumer electronics products that, let's face it, in most cases they don't really need. Responsibilities can include pricing strategy, distribution, promotion, advertising, and public relations. Marketers analyze market trends, prepare sales forecasts, manage inventory levels, and coordinate trade show preparation. Entry-level positions often require a bachelor's degree in business or marketing, while product-management positions usually require an MBA. Candidates should have strong analytical, business-planning, and presentation skills, plus good creative judgment. Salary range: $30,000 to $150,000.

Operations Specialist
Operations specialists plan, organize, and direct the purchasing, manufacturing, and distribution of consumer electronic products and components based on sales forecasts and orders. Responsibilities may include quality control, inventory control, product testing, import/export management, transportation management, and warehouse or plant management. Many of the larger consumer electronics manufacturers have plants overseas, so foreign language skills, travel, and even relocation may be required. A BS or engineering degree is usually required and strong analytical, organization, and negotiation skills are helpful. Salary range: $30,000 to $85,000.

Product and Technical Support
Support specialists are the primary contact for customers on issues ranging from product usage and product recommendations to troubleshooting support and parts and repair management. Requirements usually include a high level of telephone and customer service skills and a high-school diploma; a college degree and electronics or technology training may also be required. Salary range: $30,000 to $90,000.

Sales Representative
Salespeople manage an account base of chains and specialty stores that sell consumer electronic products. Responsibilities include ensuring that products are merchandised properly and in working condition, conducting training for store personnel, and advising on sales promotions and advertising. Salespeople need good presentation and communication skills to articulate a brand's value versus competing products. Salary range: $25,000 to $125,000.

So you're ready to find the job of your dreams in the consumer electronics industry. How should you get started? Here are a few tips to keep in mind:

  • Start with a brand or product category that you're familiar with. Employers are looking for people who can create demand for their products, and you'll find it easier if you're excited-passionate-about a given product. But don't forget to research the company you're interviewing with as a whole, including its other products and its competition.
  • Keep your eye on campus recruiting schedules. Many of the larger employers, such as Sony and Philips, recruit on college and graduate school campuses for a wide range of positions. For technical positions, you'll find many consumer electronic manufacturers represented at career fairs.
  • Experienced and entry-level candidates alike should use any and all of their industry contacts to get a foot in the door. At smaller companies in particular, networking is the name of the game. So talk to your network of contacts to see if they know anyone who is in touch with the people in the know at the company you want to work for.
  • Think about whether you want to go big or small. The training programs at large companies can be invaluable; you'll be steeped in the marketing strategy, technology, and operational structure that created a recognized brand and successful product. If you think you can handle the bureaucracy that a multinational corporation sometimes has in exchange for some good experience and credentials, the big names aren't a bad place to start. A word to the wise: Even if a small company is the first to market with a new technology, a big competitor can squash that advantage with just a few flexes of its marketing muscle. Call it the Microsoft effect. So do your research.