If gloomy reports from companies such as General Motors and U.S. Steel have you worried about American industry, other companies--such as Zapco, Novabeam, Technidyne, Atari, and Robotics International--had different news this weekend: Business is booming, factories are hiring, and American ingenuity is unmatched.
A thousand manufacturers of electronics goods--products ranging from clock radios, calculators and computers to electronic fireplaces and X-rated video tapes--showed off their wares here at the electronics industry's new-products extravaganza, the Consumer Electronics Show.
Amid the booming speakers, the glowing screens, the careening robots, and the cacophonous video games, the message emerged clearly that this industry, at least, has found ways to surmount recession.
Estimated retail sales of home and auto electronic gear reached $15 billion last year, according to the Electronics Industries Association; the trade group predicts a $20 billion level in 1983.
"We're doing great," said Jack Wayman, the association's senior executive. "We'd do even better without the recession, but sales are up, new products are up, our companies are looking for workers."
This isolated boom in the midst of bust has come even though most of the industry's products are not exactly necessities. The goods on display were intriguing, exciting, enjoyable--your 1983 Christmas present was probably at this show--but not essential.
How many executives really need a $500 desk blotter that has a built-in computer, appointment calendar, intercom, and video Rolodex? How many joggers require a $30 blackjack that contains a stopwatch, turn signals and alarm clock?
Who can say he could not survive without a $70 calculator with a built-in electric organ (boasts the maker: "the first musical instrument that can compute square roots.")?
Does any American home absolutely need a $70 telephone shaped like Darth Vadar, a $250 TV set that is 2 1/2 inches square (and gets amazingly clear reception), a $42 video game called "Nurd Alert," a $99 "Pierre Cardin Electronique" voltage converter kit, a $45 Questar Blaster joystick, a $70 videotape anthology of gory moments from films like "Texas Chainsaw Massacre" and "Blood Feast," or a $199 computer disc that will show any page of the King James Bible on the TV screen?
Yet the industry that dreams up and sells these and 10,000 related products is one of the healthiest businesses anywhere. Why?
One reason is that the industry has been the world's runaway leader in productivity for the past two decades. In the electronics business, the rule of thumb is that prices always go down.
Ten years ago, the basic four-function calculator cost $149.95; four-function models on display here average $7.95 and are smaller, faster, and far more power-efficient. Products such as digital watches and computers have seen price declines of about 30 percent every year.
Since 1967, the overall consumer price index has tripled. Goods that cost $1 then cost about $2.90 today, but the price index for TV sets has risen from $1 to $1.10 in that period.
The chief reason is an American invention, the integrated circuit or semiconductor chip, that has reduced all the circuitry of electronic devices to chips of silicon the size of an infant's fingernail. An American improvement on that invention, the microprocessor, which puts most of a computer on a single chip, is at the heart of almost all the electronic gear displayed here.
Although some aspects of consumer electronics have felt the recession--stereo system makers are hurting, for example--many manufacturers said the recession boosts their sales.
"You look at the '30s--the movie business was booming," said Joe Fusco of Sony. "It's the same now--we're selling entertainment. People will take the money they're not spending on cars and houses and clothes and buy something fun."
The lust for fun clearly lies behind the explosion of new video games in evidence here. About 60 makers introduced 300 or so new games this weekend. For reasons sociologists will no doubt study in depth, many of the games have food themes--"Burger Time," "Piece of Cake," "Eggomania," "Fast Food," "Revenge of the Beefsteak Tomatoes."
Having exhausted its imagination trying to match such game names as "Worm War I," "Zaxxon" and "Thorlian Tunnels," the U.S. Games Co. brought out a game called "Name This Game," with a prize for originality.
The biggest hits of the show were a half-dozen new entries in the under-$100 home-computer market. The advent of many computers at the lowest end of the highly sectored market is expected to speed up dramatically computer ownership in the United States.
Industry analysts who estimate that $3.5 million Americans own computers expect that number to increase by more than 100 percent this year. If the growth continues, home computers will be as common as television sets and toasters well before the end of the decade.
Another major market in its infancy is the telephone business; that is, those businesses that compete with the Bell System. About 25 companies were displaying 2,000 different telephone models.
"Look, everybody needs a phone, and only 10 percent of American homes own their own," explains Wayman of the trade group. "This is going to be an amazing, billion-dollar market."
You could buy a plain black-dial telephone from the companies exhibiting here. But you could also buy the Darth Vadar phone, a denim-clad phone, a designer-label phone or a glittery electronic phone that resembles a sequined donut.
You might want to pick up an "expansion phone," a plain white unit on a stand that automatically rises from four feet to nine feet high when the telephone rings. It costs $489 with a table lamp on top as an option.
"I'm the inventor," said Joel Schwartz, beaming with pride as his brainchild gyrated up and down. "We're not sure who might use it, but it looks great, doesn't it?"
The show is a tribute to invention, and the inventors display their creations with a mixture of pride and anxiety. As one said, "If you get a new idea in this business, you can bet 20 guys will steal it tomorrow."
At least he won't have long to wait to find out. The entire electronics industry will show its wares again in Chicago in June. "We have to do it that way," Wayman explained. "If we wait longer than six months, the industry has so much new stuff that nobody could keep track."
The games-makers argue that Wall Street analysts are wrong in suggesting that the video game market may turn sour. Officials of Atari, the market leader, said the precipitous drop in their company's stock last month was due to exaggerated expectations on Wall Street. They note that sales have continued to rise, if not as fast as they had predicted.