Slow and steady were the business buzzwords at last month’s Electronics Distribution Show in Las Vegas, where leaders from electronic component manufacturing and distribution firms converged for three days of one-on-one business meetings and networking. In addition to honing their capabilities as solution providers in today’s marketplace, distributors in particular say they are focused on three key markets they’ll be investing in this year: automotive, lighting and the Internet of Things.
In conversations with some of the industry’s top distributors, these three areas kept popping up as good market opportunities for sellers of electronic components and related services, despite today’s slower business conditions. Some of these areas represent well-established strongholds for many companies, while others—particularly IoT—are fertile ground for new research and investment. Here’s a look at how some leading distributors view today’s best opportunities:
Avnet Electronics Marketing sees continued growth opportunities in the automotive industry, according to Chuck Delph, who will take over as president of Avnet EM Americas July 3. Delph points to consumers’ changing attitudes about cars as a key reason for that optimism. For buyers today, the car is a shell for connectivity, placing greater importance on options surrounding safety, comfort, and convenience.
“It’s interesting how the automotive market is changing,” Delph says. “From the distribution perspective, it’s not just the electronics [that are] going into the car. It’s also our ability to service the content in the car.”
Beyond electronics, services surrounding data, security and business analytics represent potential market opportunities for distributors, he says.
“We’re in a mature industry. Many people want to say ‘woe is me’ about the market. But I see it differently,” Delph says. “You have to come at these markets and say ‘how do we behave differently?’ That’s what we are doing.”
Lighting the Way
Delph points to growth opportunities in lighting as well—particularly related to controls. LEDs themselves have become a mature market, but the potential remains on the controls side of the business, distributors agree.
“Lighting remains a growth vertical because of all the electronic content that goes into the controls,” Delph explains. “So you will hear us talking about investment there. It’s the lighting vertical itself that will continue to grow.”
Sager Electronics continues to see “a lot of wins in lighting,” adds Faris Aruri, the company’s vice president of corporate marketing, due to its focus on drivers and controls.
“That was a market you expected to be huge because there was so much talk,” Aruri says, referring to the LED craze of a few years back. “I think it’s still got so much room [for growth].”
Rich Davis, president of WPG Americas, agrees, pointing to WPG’s success with large lighting projects in cities nationwide.
“It’s not so much [about] selling the individual component,” he says. “It’s selling the complete assembly or complete solution.”
Banking on IoT
Davis adds that WPG is using its experience in lighting to guide its work on the newest frontier: the IoT. He explains that when LED lighting was taking off, the market was flooded with start-ups and industry hopefuls looking for design and product support—many of whom did not succeed. The IoT is a similar phenomenon.
“Right now, it’s a ‘we’ll see’ in many ways with the IoT. We’re waiting to see who will grab the bull by the horns,” he explains. “We are probably more aware of that because of where we’ve been. As you try to grow an organization, [you have to be] concerned that you use your resources well.”
WPG Americas is a division of Taiwan-based WPG Holdings and is focused on four key areas in the Americas: IoT, embedded, power, and lighting. The company has been steadily expanding in the United States, opening three new facilities—in Massachusetts, New York, and Illinois—in the last nine months.
Avnet is focused on IoT as well, having recently hired an executive to lead the initiative across the company’s electronic components and technology solutions business units. Eric Williams was hired as vice president of IoT earlier this year. Delph emphasizes the potential for solutions selling in this market, where companies focused on solving customers’ problems with a combination of products, services and technology are in the best position to capitalize on new business.
“It’s an exciting time,” Delph says. “We have an opportunity in a mature industry to create growth and innovation—to create models that differentiate [us]. Rather than sit around and wait for our competitors’ moves, we have to say ‘how do I separate myself even further?’”