Luxury Market Appears Broad, Stable

While indications of a recession -- economic growth has slowed, home foreclosures are on the rise and inflation and credit card debt are both high -- are present today, they may not mean that much to the CE industry.

The United States Census Bureau's "Selected Measures of Household Income Dispersion" report shows that between 1986 and 2007, the wealthiest 20 percent of the nation's population (which is made up of those households in 2005 receiving at least $159,583 annually) saw its mean household income increase 32.5 percent.

At the same time, the rest of the country (80 percent of the population), saw its mean household income increase just 11.5 percent.

According to economist-writers Thomas Piketty and Emmanuel Saez, the top one percent of U.S. households received roughly 22 percent of the nation's pre-tax income in 2005.

They write, "This is the greatest concentration of income since 1928, when 23.9 percent of all income went to the richest 1 percent."

The takeaway? During the 1970s, the recession likely affected the spending habits of all but the very wealthy, which was, perhaps, the top 10 percent or less of the population.

Over the last 20 years, however, trends suggest the top quintile (20 percent) of the population has become exceedingly wealthy.

For businesses focused on the luxury market, this means there is a much broader, more stable customer base for their high-end goods and services -- even in midst of a slowed or recessing economy.

Luxury: The Other Economic 'Vantage'

Industry information supports the notion that custom integration and the high-end consumer electronics market is stable.

For example, overall sales of LCD TVs were up 74 percent from 2006 to 2007, generating $19.9 billion in revenues in 2007, according to Quixel Research's LCD TV Market Review study.

Indeed, many manufacturers, not just those in the "advanced TV market," as Quixel calls it, are expecting sales to be solid in the coming months and years.

Vantage/Legrand is one manufacturer looking to meet continued high-end demands.

"The types of homes that would include a Vantage system would also be likely to have satellite TV, a home network, home office network capabilities (with phone), distributed audio and video and more," explains Derek Jensen, marketing communications manager for the company.

For this reason, the Vantage/Legrand (booth #1313B) has a narrow focus on the luxury residential portion of the CE market.

The company's ProLAN structured wiring cabinet, for example, is getting a lot of marketing attention from its maker.

"The amount of technology included in today's luxury home has increased dramatically in the past few years," says Andrew Wale, marketing vice president of the Orem, Utah-based company.

Vantage/Legrand recognizes, therefore, like so many companies exhibiting at EHX, that luxury installations are beginning to appeal to a wider sales base.

"It is no longer practical to build a home without a dynamic system for managing the miles of cable required for communication, security, networking and entertainment," he says.