Market crisis or opportunity?

By Jerry Gipper

Executive Director

VITA

November 01, 2008

Market crisis or opportunity?

Despite these tough economic times, technology vendors can take advantage of some golden opportunities.

By the time you read this, the U.S. elections will be over and American voters will have selected a new president elect. This has proven to be a momentous election year with lots of firsts, most notably the first African American presidential candidate and the first female vice presidential candidate. The usual political rhetoric is on overdrive as the campaigns head toward Election Day.

Making this voting season even more interesting is the worldwide economic meltdown. Everyone wants to know how the candidates plan to address this financial crisis, to which no industry is immune. High technology has done much to strengthen its position as the current slump deepens, but even now, it's starting to feel the impact and showing signs of a slowdown. Earnings are soft and cutbacks have begun.

Within these tough economic times are some golden opportunities. Billionaire Warren Buffet's “Be fearful when others are greedy and be greedy when others are fearful” rule of investing leads me to believe that we will see an increase in or at least a steady stream of acquisitions as companies with cash look for great deals. Valuations are low, and many companies are looking for buyers to bail them out. Watch for some acquisition activity in the coming months as aggressors try to strengthen their product and market positions.

Local manufacturing could see a surge in the near future as companies consider bringing jobs back home. Government incentives will become common as politicians seek to improve the unemployment situation and local economies. Companies are discovering that Asian manufacturing doesn't offer the same financial benefits as it did a few years ago. Salaries around the world are quickly becoming flat, and fuel costs for shipping products are tacking a significant chunk of change onto the total product cost. Moving manufacturing and design jobs back to local sites improves product quality and boosts employee morale. Smaller regional companies can especially benefit from local manufacturing and design.

Belt tightening is affecting companies now and will continue to do so for the next few quarters. This is a great time to improve processes and increase automation as the workforce shrinks. Reduction means that someone has to pick up the slack, and without process improvement and automation, it is difficult to pull off. Some great productivity tools that may have seemed too expensive in the past are now essential for designers to remain competitive with smaller workforces.

Innovation is another way to gain ground during an economic downturn. Though we seem to be in an innovation lull, the companies that can create breakthrough products will get more than their share of the tight spending. Apple is a prime example of a company doing just that. With buyers specifically requesting iPhones and iPods and Apple stores busy at all hours, the company is thriving and even ranks as the third-largest mobile phone supplier in the world. This type of innovation is essential for success at any time, especially when the market is slow.

Energy-efficient products will have an advantage as buyers continue to feel the energy crunch. Most buyers don't consider embedded electronics to be large energy consumers, but they are becoming more conscious of how much it costs to maintain entertainment systems, lighting technologies, and transformers in their homes. Government initiatives on energy consumption continue to raise awareness about this issue.

The last opportunity I'll mention is one of my favorite topics – mass customization. As buyers become more discerning about how they spend their hard-earned cash, they expect products to do exactly what they want. Products that meet their needs and make them feel unique will gain the greatest interest from penny-pinching buyers. Companies must be able to quickly modify and personalize their products to grab consumers' attention.

To voice your comments on this subject, send me an e-mail or visit our blog at www.embedded-computing.com.

I'm off to go vote now. Have a happy holiday season! I look forward to a very interesting 2009.

Jerry Gipper
Editorial Director
[email protected]

 

Jerry Gipper (Editorial Director)

Strategic Marketing Specialist. Innovative, energetic with extensive business development and product marketing experience in high technology. A proven track record of successful product definition and management. Skilled at defining strategic and business objectives with executive management. Possesses excellent communications, leadership, analytical and problem solving skills with a strong focus on customer and employee satisfaction. Specialties: acquisitions, business development..

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