The State of the Industry - Australia Australia’s domestic consumer electronics devices market, defined as including computing devices, mobile handsets, and video audio, home entertainment, domestic appliances and gaming products, is projected to be worth around US$12.2bn. In 2009, with the government stimulus handouts and lower interest rates is having a positive effect on driving growth. Retailers predict continued sales growth but with margins under pressure.

Australian Economy Coupled to Asia Japan, China South Korea & India account for >50% of AUST exports

Harvey Norman – 98 stores Harvey Norman retail sales for the three months up to 30 September 2009 rose 4.3 per cent, Mr Harvey, the chairman, said that Harvey Norman would have a "positive future" and added that it was increasing market share in “all key product categories”. Management said there was a "significant improvement" in net profit from underlying operations in the second half of the year. IG Markets analyst Cameron Peacock said: "The Harvey Norman result, while slightly down on last year, is clear confirmation that analysts became too pessimistic about the health of consumers and certainly underestimated their resilience.” Harvey Norman's franchisee sales revenue was $5.06 billion, up from $4.86bn, while company-owned sales revenue was $1.44bn, compared with $1.43bn in fiscal Despite the growth in sales, full-year earnings before interest and taxes from continuing operations fell 31 per cent to $383m, from $555.1m last year. Management said margins at Harvey Norman, franchisees in Australia remained under pressure.

JB Hi FI – 130 stores HOME entertainment retail chain JB Hi-Fi has reported a surge in consumer spending and is tipping a strong Christmas trading season as shoppers shrug off the impact of higher interest rates. Sales growth for existing JB stores had increased over the past six weeks from 3.8 per cent in mid-August to average 8.4 per cent for the whole of the first quarter The company expected another year of sales and earnings growth and said fiscal 2010 sales should be around $2.8 billion, up 20 per cent on year Government stimulus cheques helped support consumer spending in the first half of the year but that money had largely worked its way through the system by July, so positive sales trends in recent weeks were an encouraging sign for the retailer. Home entertainment continues to become more of a staple category as consumers embrace technology." Home entertainment products continued to be popular with consumers, despite the broader economic slowdown, JB Hi-Fi said. For the most part, retailers in the clothing, department store and supermarket sectors have been reporting sales growth for the year. The company raised its target payout ratio to 50 per cent of earnings to reflect "continued strong cash flows from existing stores" as well as "overall company growth".

Expected timing for improvement in business conditions  Around 40 per cent of businesses expected an improvement in business conditions before the end of the year.  Services firms were the most likely to believe an improvement in conditions was already underway.  Fiscal and monetary policy stimulus appears to have had an impact in the sector.

Sector Performance & Trends Data for some key CE product sectors Product sales and market trends: > Small Kitchen Appliances > Air Conditioners > Flat Panels, DVDs & Set Top Boxes > Vacuum Cleaners > Personal Care > Cordless Phones > Interactive Games

Small Kitchen Appliances + 5.1%

Air Conditioners + 4.1%

Flat Panels, DVDs & Set Top Boxes + 141%

Vacuum Cleaners + 6.7%

Vacuums - Bagged vs Bagless + 4%

Personal Care + 9.4%

Cordless Phones - 4%

Interactive Games In Sales of Video & Computer games is worth $1.5 Billion (AUD) an increase of 53% on the previous financial year The Interactive Entertainment Association of Australia:

Ai Group’s Strategic Position The strategic objectives of Ai Group’s electronics industry development agenda are to:  identify, improve and develop the capability of the electronics industry; promote a high level of communication, networking and cooperation in the electronics industry;  optimise the interaction and cooperation between government and the electronics industry;  promote greater involvement in national and global markets and increase the level of technology diffusion through global alliances; and  identify industry skills requirements and improve training and education programs.