It’s not the headline the organisers of this year’s IFA want to see, but the biggest news from the opening press conference today was that demand for consumer electronics in Europe is likely to fall by 2.4% this year to €64.3bn. Perhaps that’s not surprising in the context of the global credit crunch and a constant stream of gloomy economic news, but it will be the first time European gadget sales have gone into reverse for some years, and follows an increase of more than 7% in 2007. The fact that the German domestic market is bucking the wider European trend provides a glimmer of light in what is certainly a tough environment for the world’s major brands, all of whom will have massive displays of their latest technologies here in Berlin over the next few days. IFA (or Internationale Funkausstellung if you prefer), while its claims to be a truly international convention generally stand up to scrutiny, is also very firmly a German event for German retailers as well as the (German) general public. The 3.8% growth in German CE sales expected for 2008 will give heart to manufacturers who have been suffering from the sharp downturn in other European markets, notably the UK, where sales so far this year are down by 11%. One of the factors attributed to the stark contrast between the UK and German markets was that the UK’s national football teams, England, Scotland, Wales and Northern Ireland, all failed to qualify for this year’s European football finals in Austria and Switzerland, in contrast to Germany, which not only qualified but reached the Final. I’ve always felt the importance of major sports events in driving consumer electronics sales in particular countries has been overplayed somewhat. It can be difficult to divorce this particular factor from the economic environment in general and the natural maturity cycles of different products. And while sales of big screen TVs may be brought forward for the sake of a sporting event, this may lead to a downturn during the rest of the year. So far this year Germany and the UK’s respective sales performance seems to be proving me wrong , but let’s wait and see what the final year’s results look like. Perhaps the UK’s success at the Beijing Olympics will have led to a second half revival in UK flat panel TV and set-top box sales to even things up. Visit us at IBC: Web TV and Virtual Worlds Analyst Presentations