Eamonn Walsh, Director of Brainboxes Ltd, makes predictions for 2006

Eamonn Walsh Discusses future
Eamonn Walsh speculates on the future

The UK economy has turned a corner and tougher times will be had by many says Eamonn Walsh of Brainboxes. This will be reinforced psychologically by a very cold winter. Then the high fuel bills will arrive.
Higher taxes will be brought in via the next Spring’s budget, this combined with higher indirect taxes will put pressure on businesses to increase wages.
The public / private sector pension in equity will gain more exposure as businesses are the first to react to the tightened circumstances
Employment sector once so buoyant will slacken. House prices will remain firm though out this next year.
Imported electronics will continue to grow.
A sifting out of the really good companies from the merely ok will occur- as tighter circumstances favour those prepared and reactive. Customers will spend their cash more carefully.
A few 2nd and 3rd tier PC companies may well go to the wall. Increasingly, only the very lowest cost companies and those that can earn money from services will thrive.

Sky’s launch of its High Definition TV, HDTV, service in late Spring 2006 will give Set Top Box manufacturers a boost, earn Sky more high end subscribers and depress its profits due to the investment involved. BBC will not get any HDTV content broadcast until late this decade- this is a great shame and will put a break one the up take of HDTV, sales of TV sets, hard disk recorders etc.
Flat screen TV, mainly LCD will soar. DVD market will be flat due to lack of convincing cinema blockbusters in 2005. The launch of next generation DVDs will be blighted by the competing standards of Toshiba’s HD-DVD and Sony’s Blueray and lack of pre recorded HDTV content.. This will only be resolved in 2007/8 when the Sony Playstation 3 appears and the installed base of HDTV compatible TV sets has grown.
Electronics stores will see intense competition from internet sales stores across all product types.

Cash will become king again in business.
The US and Far East economies will continue to grow strongly- those companies exporting to these regions will do well. European economy will thrive only in those eastern new entrants countries and stagnate in Germany, France and Italy. Italy will be under internal pressure to withdraw from the Euro and from outside pressure to remain.

Bluetooth worldwide will continue to set records in the number of chip sold. Wireless USB based on Ultra Wide Band UWB will launched late 2006 will be lapped up by consumers.
Microsoft’s new Windows operating system called Vista will launch to consumer acclaim for the Christmas 2006 market but will be ignored by business till late 2007 early 2008.

RoHS will have a big impact, far worse than the predicted problems that the Millennium bug may have caused. Early 2006 every one will wake up to the imminence of the 1st July deadline. A flurry of business late Feb/March/ April of installation of non-RoHS systems will give way to a dead zone for sales after mid May unless you have completely RoHS product lines due to the need to flush the non RoHS through the supply chain.
The potential of massive write offs of non ROHS stock held after 1st July deadline that would cause depressed company profits and lower tax revenue for the government will force a last minute postponement of the non RoHS deadline for 6 months till 1st January 2007. 
Overall, 2006 will be a roller coaster year for business good fro those with hot products, big exports, deep pockets, good planning and strong nerves.

Go back