Electronics sales boom expected24 October 2004
Strong holiday sales of products such as digital cameras, video games and wireless phones should help push U.S. consumer electronics spending to a record level for the year, an industry report says.
Electronics manufacturers are expected to meet that demand by shipping $108.8 billion worth of products by the end of 2004, an 8 percent increase from last year's record $100.7 billion in wholesale revenue, according to an annual holiday sales forecast presented last week at the Consumer Electronics Association meeting in San Francisco.
Meanwhile, a consumer survey of 1,000 people nationwide showed that top gift ideas for the holidays were flat-panel plasma television monitors and digital cameras.
The trade association presented its annual Holiday Sales and Forecast survey during a three-day CEA Industry Forum, which was designed to give about 600 top executives an overview of important trends and issues.
For example, one panel said electronics retailers could benefit by paying more attention to the needs of an underserved market of women customers.
Consultant Jen Drechsler, who has been helping the Best Buy chain market its products better to women, said women often wield veto power over household spending, a significant factor because U.S. households spend about $457 billion annually on food and $100 billion on consumer electronics.
Consumer electronics spending has remained relatively strong in the past two years, even as the country struggled with recession and the aftermath of the 2001 terrorist attacks.
A survey of 1,000 people nationwide earlier this month indicated that 41 percent of consumers believed the economy was better than last year, and 22 percent said they planned to spend more money on gifts, including those they give themselves, said Sean Wargo, the electronics association's director of industry analysis.
Also, about 76 percent of the people surveyed planned to buy at least one consumer electronics product as a gift this year, compared with 71 percent last year.
Of the products people plan to give, digital cameras topped the list, followed by video game systems, cellular and cordless phones, and portable CD players.
Home DVD players, which are now in more than 55 million households, dropped from first to sixth on the gift list. DVD recorders, making their first appearance in the survey, ranked a strong seventh.
In the survey, people said what they wanted most was a plasma TV. However, only 9 percent of those surveyed said they planned to give one.
About 20 percent planned to buy a laptop computer, which is significant for the industry because laptops represent about 16 percent of revenues, "our single biggest contributor," Wargo said.
Sales of digital audio players like Apple's iPod are expected to increase 147 percent, although those products only make up about 1 percent of the industry's overall revenue.
"It's a very strong category, and one well worth watching," Wargo said.
Also at the meeting, the trade group announced that it had reached an agreement with major airlines such as Continental, American and Northwest on a new symbol that will indicate whether the wireless components of a portable electronics device are operating during a flight.
The increase in wireless laptops, handheld computers and cell phones has worried the airline industry because the radio emissions devices could interfere with the operation of planes. But some devices have functions, such as address books and video games, which operate without radio emissions.
The new indicator, which looks like a martini glass, will be built into future devices to give passengers and crew a way to see whether a wireless device is operating.
Source: Detroit News
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