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July 1955 Radio-Electronics
 [Table of Contents]
Wax nostalgic about and learn from the history of early electronics.
See articles from Radio-Electronics,
published 1930-1988. All copyrights hereby acknowledged.
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In this 1955 report on the
status of the electronics industry, Radio-Electronic magazine editor
Hugo Gernsback summarizes a presentation made by RCA president Charles Odorizzi
to the Cleveland Society of Security Analysts. He began thusly: "Few if any industries,
in such a relatively short period of time, have experienced such amazing growth
as electronics. From 1940 to the war's end in 1945, the annual dollar volume of
the industry increased from $500 million to $4.6 billion." So was born what President
Dwight D. Eisenhower would in 1961 term the
Military-Industrial
Complex. Being a capitalist and small government type at heart, I am somewhat
conflicted with the concept because on the one hand I eschew government controlling
industry and academia (aka communism), yet on the other hand I recognize the need
for maintaining a strong military in order to both deter and defend against foreign
aggression. The same goes for allowing pure market forces to determine the direction
of research and production without government intervention; the result would be
the same as allowing a purely democratic form of government - the majority, even
by a thin margin, would decide what everybody else does. That is why America's representative
republic works (or until recently used to work) so well - it is a carefully crafted
mix of government and public coordination of policy.
Status of the Electronic Industry
 Hugo
Gernsback, Editor
... Comprehensive survey of a new giant ...
 Recently
C. M. Odorizzi, executive vice president of the Radio Corporation of America, addressed
the Cleveland Society of Security Analysts, giving a comprehensive view of the electronic
industry. The following is a condensed report of this most informative talk.
Few if any industries, in such a relatively short period of time, have experienced
such amazing growth as electronics. From 1940 to the war's end in 1945, the annual
dollar volume of the industry increased from $500 million to $4.6 billion.
Then followed a post-war dip that quickly was corrected by three principal factors:
first the rise of the new television industry; second the industrial adoption of
electronic controls; and third, the implementing of a realistic concept and standard
of national defense requirements. So rapid was the upturn that in a little more
than six years after the war's end - by 1952 - the electronics industry had achieved
a $7 billion annual volume.
Today, the curve continues to rise. By latest estimates, the electronics industry
should show a total business that will reach close to $9 billion by the end of 1955.
According to surveys by RCA, these figures will maintain their climb and by the
end of 1957 the annual total should be nearly $12 billion.
All of you will recollect how the television receiver industry made its spectacular
advance from a mere $1 million at factory prices in 1946 to its peak of $1.4 billion
in 1950. By 1957, a year when color television is expected to be making rapid progress,
black-and-white sales are expected to drop back to less than $400 million. By that
time, it is estimated the industry factory billings of color sets will be near the
billion mark. Thus, the estimated total of television set sales to the consumer,
namely 6.4 million units in black-and-white and color, will then be approaching
the total sales of 6.6 million units reached by black-and-white sales alone in 1950.
Government purchases of electronic equipment, which will total $2.5 billion for
the industry this year, are estimated to increase to approximately $2.9 billion
by 1957.
In only one broad classification of electronics, that of automobile radios, industry
sales seem to have reached a condition of stability. For several years auto radios
have maintained annual sales slightly in excess of $100 million, a total that is
likely to remain constant for the next few years at least.
The majority of remaining classifications in the electronics field provide food
for thought for the optimist. These include the sales of repair parts and replacement
tubes, broadcasting and communications, industrial and commercial equipment, service
and installation, and, of course, color television.
Let me give you an idea of the potentials of these groups by comparing the industry's
going rate with rates projected into 1957.
Repair parts and replacement tubes, which will gross about $250 million this
year at factory prices, will total $453 million in 1957. The present and future
totals for the broadcasting and communications industry are $1 billion and $1 1/2
billion, respectively. Industrial and commercial equipment will increase from $274
million to $520 million; color television, now a mere infant, will expand to $950
million in four years.
Servicing
Servicing, in my opinion, is a subject that has not been given its due importance
in most industrial analyses. Today, however, industrialists are paying more and
more attention to its role in successful manufacturing and merchandising. Service
with a capital "S" has become a vital building block in the foundation of American
business.
Would the automobile have developed into a $45 billion industry if owners had
been forced to repair and maintain their own cars? Would the electronics industry
have made giant strides toward its present $9 billion position if buyers had not
known that trained technicians were available to keep their instruments in operating
condition?
The answer obviously is "No." The attitude of the manufacturer toward service
was certain to change as he recognized the irresistible changes in life and customs.
Service, therefore, has become an important facet of the nation's business structure.
The consumer knows the value and economy of keeping the products of modern science
and industry at peak efficiency. When properly organized, service pays its own way.
It is a good investment that produced manifold returns in many forms.
Some measure of the importance of service to electronics is shown by the fact
that today nearly 100,000 service technicians are employed in the industry, most
of whom are in radio and television service for the home. With the expected growth
of the electronics industry, more than 125,000 technicians will be needed in 1957.
I know of no merchandiser who is more thoroughly sold on the role of service
in making and repeating sales than Frank M. Folsom, president of the Radio Corporation
of America. Often he has said:
"In every city of the United States there is a successful business that is a
living monument to some man with the simple but fundamental objective of making
sure his customers were properly taken care of."
In 1946, when television emerged from behind the curtain of war to begin its
phenomenal growth, the industry's return for servicing home television and radio
sets was less than $145 million, not including the cost of parts. Four years later,
in 1950, comparable figures had increased to $710 million. In 1953, the total was
$1.4 billion and by the end of 1957, this part of the electronics industry will
contribute $2.7 billion annually to the national economy for the home installation
and maintenance. In other words, during the next four years, from January 1, 1954,
to January 1, 1958, the industry's gross income from this service will have almost
doubled.
With these figures in hand, it is only natural that they should be compared with
the overall volume of business produced by the electronics industry. Total annual
sales of this industry grew from $1.6 billion in 1946 to $8.4 billion in 1953. Thus,
in 1953, service was responsible for 16.4% of electronic industry sales. This is
almost as much as the total sales of all electronic products, to both consumers
and the Government, in 1946. As the use of electronic apparatus increases with automation
and the application of electronic controls to industry, plus the spread of television
service, the sales of service will increase accordingly.
Electronics Is Core of Automation
Undoubtedly, you have frequently encountered the word automation. You will hear
more of this trend of industry to conceive, design and build the automatic factory-automatic
to a great extent from raw material to finished product. We have not yet arrived
at the latter state but we are making good progress, for electronics is the core
of automation, and the electron is one of the world's most versatile and flexible
tools.
We are succeeding through electronic controls and automation in speeding up the
progress of industry, and by so doing are reducing the time lag that heretofore
has slowed up the conversion of raw materials into finished goods. This increased
impetus of production also has made it possible materially to reduce the costs to
the ultimate consumer. By taking the developments of scientists and engineers and
merchandising them with modern, efficient methods we have contributed substantially
to the nation's economy.
Although this record of achievement is outstanding, the promise of the electronics
industry in the future is even brighter. One of the most impressive long-range views
was expressed a short time ago by Brig. Gen. David Sarnoff, chairman of the board
of RCA, who said:
"Whatever the size of the electronics, television and radio business seven years
hence may be, I am sure that more than 50% of the volume will be in products and
services that do not exist today."
Posted March 11, 2022
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