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Convergence of Digital Consumer Electronics Market Drives Alliance Formation Among Companies

Strategic Insights

— 1 min read

The emerging digital consumer electronics market is poised for significant growth, driven by the convergence of technologies such as TVs, stereo systems, personal computers, and cellular phones. To tap into this market, consumer electronics companies are forming strategic alliances with computer and software firms, leading to a multipronged approach in the industry. Companies like Matsushita Electric Industrial Co. and Hewlett-Packard Co. have agreed to make their DVD devices compatible, while Microsoft Corp. has partnered with MTV Networks Inc. and other firms outside the computer business to supply software for various digital devices.

Key Takeaways:

  • The US digital consumer electronics market is expected to grow by 50% from current levels to $160 billion in 2007 (Source: Nikkei).
  • Consumer electronics companies are forming alliances with computer and software firms to tap into the emerging digital consumer electronics market.
  • Matsushita Electric Industrial Co. and Hewlett-Packard Co. have agreed to make their DVD devices compatible, allowing DVDs recorded on Matsushita products to be played on HP's DVD devices, or vice versa.
  • Microsoft Corp. has partnered with MTV Networks Inc. and other firms outside the computer business to supply software for DVD devices, including those made by LG Electronics Inc. of South Korea and plasma televisions by Pioneer Corp.
  • The convergence of digital consumer electronics around the concept of home networks is driving the growth of the digital consumer electronics market.
  • Uncertainties remain about which technologies and standards will become dominant, leading to a multipronged approach in the industry.
  • Alliances among consumer electronics makers and computer-related companies are being formed in the area of digital copyright protection, with Matsushita choosing Microsoft and HP choosing Royal Philips Electronics as partners.

Statistics:

  • The US digital consumer electronics market is expected to grow by 50% from current levels to $160 billion by 2007.
  • The emerging digital consumer electronics market is driven by the convergence of technologies such as TVs, stereo systems, personal computers, and cellular phones.
  • 50% growth rate in the US digital consumer electronics market from current levels to $160 billion in 2007.
  • Digital consumer electronics market expected to reach $160 billion by 2007.

Sources:

  • Asia Pulse, 07-01 1850
  • Nikkei

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