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What are the strong markets in IC downturn?

Posted: 21 Nov 2008     Print Version  Bookmark and Share

Keywords:game industry  software sales  LED lighting 

Amid the doom and gloom in hi-tech, there are at least two strong markets right now: the U.S. game console market and LEDs.

Sales for the U.S. game industry ''proved resilient with a 19 per cent jump in October,'' said Steven Pelayo, an analyst with the Hongkong and Shanghai Banking Corp. Ltd (HSBC), in a report. The figure includes both hardware and software sales.

''Strong revenue growth in October confirmed the U.S. game industry is weathering the macroeconomic turmoil very well,''' he said. ''The Wii strengthened its leadership while the Xbox 360 maintained its positive momentum. Nintendo is the likely winner this Christmas.''

Indeed, the Wii continues to be a big hit. ''Nintendo continues to excel'' in October,'' he said. ''Wii unit sales saw strong yearly growth (54.7 per cent) and Nintendo continued to excel in the software ranking. Xbox 360 sales continued to grow in October (6.9 per cent) and given the positive impact of previous price cuts, this console is likely to maintain its positive momentum going forward.''

Not all is well in gaming, especially with Sony Corp. ''Despite growing 57 per cent year-over-year, PS3 sales declined from the previous month (18.1 per cent) as Little Big Planet arrived too late to make a difference,'' he said. ''This being said, November sales are likely to improve on the back of new exclusive titles. Sales for portable consoles (DS and PSP) dropped a combined 11.7 per cent month-over-month. Lack of strong software title releases was the likely reason, thus we believe this drop is not a concern.''

Besides gaming, LEDs are hot. For example, LED lighting is projected to be a Rs.2,001.46 crore ($400 million) market in 2008, according to Databeans Inc.

The firm predicts that this market will see a compound annual growth rate of 35 per cent, which will cause the market to grow to Rs.9,006.55 crore ($1.8 billion) by the end of the forecasted period in 2013.

''LEDs have traditionally been used for signs, signals and displays, but are now are rapidly evolving to provide light sources for general illumination in households and businesses,'' according to Databeans.

''Although LEDs currently cost five times more on average than incandescent bulbs, they consume 80 per cent less energy and last nearly five times longer,'' according to the firm. ''Also as mandated performance standards effectively phase out less efficient incandescent bulbs within five to ten years, experts predict that LEDs will save American households over $280 billion (Rs.1,401,018.92 crore) in energy costs over the next 20 years, and that the technology will make up over 70 per cent of the total lighting market by that time.''

-Mark LaPedus
EE Times

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