Luxury Brands and Consumer Electronics
The New York Times commented this weekend on the fact that luxury brands are outperforming low cost brands in the 2004 Christmas shopping season. This article nicely validates a long term trend identified by Silverstein and Fiske in "Trading Up: The New American Luxury". But we believe this trend isn't just about Gucci bags and Hermes scarves; we can see it playing out in consumer electronics with companies like Bose Corporation seeing new cache in their brands as consumers start seeing them as luxury brands too.
Need more proof that the luxury brand trend is diffusing into electronics? Take a look at the PC industry. For years, the conventional wisdom was that only companies with the lowest costs could win in PCs, implying that high touch, high value companies like Apple were doomed. In fact, Apple has been proclaimed dead or doomed no fewer than 43 times in major press since 1995. Yet last week, it was PC maker IBM who sold its PC business, joining the ranks of Compaq, eMachines, and others who found the relentless price competition against Walmart-inspired Dell too unprofitable. The major market research companies have lowered growth for the PC sector in general, and even ingredient brand companies Intel and Microsoft are struggling to keep their stock prices up. Apple, in contrast, will likely see one of its best years ever in 2004.
We'll be continuing to look at this trend next month when Blackfriars will visit the 2005 Consumer Electronics Show in Las Vegas. After all, no event better illustrates the tyranny of too much than CES. But meanwhile, selling luxury in electronics seems like a trend that marketers should stay tuned to.
Need more proof that the luxury brand trend is diffusing into electronics? Take a look at the PC industry. For years, the conventional wisdom was that only companies with the lowest costs could win in PCs, implying that high touch, high value companies like Apple were doomed. In fact, Apple has been proclaimed dead or doomed no fewer than 43 times in major press since 1995. Yet last week, it was PC maker IBM who sold its PC business, joining the ranks of Compaq, eMachines, and others who found the relentless price competition against Walmart-inspired Dell too unprofitable. The major market research companies have lowered growth for the PC sector in general, and even ingredient brand companies Intel and Microsoft are struggling to keep their stock prices up. Apple, in contrast, will likely see one of its best years ever in 2004.
We'll be continuing to look at this trend next month when Blackfriars will visit the 2005 Consumer Electronics Show in Las Vegas. After all, no event better illustrates the tyranny of too much than CES. But meanwhile, selling luxury in electronics seems like a trend that marketers should stay tuned to.
posted by Carl Howe at
10:50 AM
| View blog reactions
| 
