CEA: Holidays Full of Good Cheer
By Suzanne Deffree -- EDN, November 13, 2006
NEW YORK -- The Consumer Electronics Association (CEA) is standing by its predictions for a 2006 holiday season that will be “full of good cheer” for the consumer electronics industry.
CEA, which hosts the annual Consumer Electronics Show in January, last week held a press conference here where its analysts disputed other market analysis that this year’s holiday shopping season will be anything but joyful for the electronics market.
“We want to put that to rest today. All of the research suggest we are off to a great start,” Sean Wargo, CEA's director of industry analysis, said.
Wargo believes that while new technologies like blue-laser DVD have not yet passed the early adopter stage and while next-generation gaming consoles have been delayed or are just arriving, the CE industry will benefit from a current replacement cycle on lower-cost, mainstream products, specifically pointing to digital cameras.
“Digital camera is the number one most cited CE gift of the year. Digital cameras are now in a very aggressive upgrade cycle, as people replace their two or three mega pixel cameras they bought a few years back,” he said.
Indeed, in a September CEA survey of about 1,900 adult Americans, digital cameras came up a CE product 37 percent said they were “most likely to buy” this holiday season. “This is one of the highest ‘intentions to buy’ we have ever seen. This is a very healthy contributor to our total industry,” Wargo said, noting shipments of digital cameras are already up 48 percent for 2006 compared to 2005. Other hot electronics included MP3 players, PCs, wireless phones and televisions.
Overall, CEA believes CE gifts will account for a quarter of all gifts with revenues reaching $21 billion this holiday season, compared to $17 billion, or 21 percent, in 2005. The organization pointed to economic data such as lower gasoline prices, housing equity and a record low delinquency rate on loans and leases to exhibit the abilities consumers will have to spend this holiday season. Wargo also noted that Q4 shipment revenues on CE products is expected to be up 15 percent from 2005, the best Q4 in recent history; 2005, 2004 and 2003 saw 12 percent, 5 percent and 14 percent year-over-year gains, respectively.
“We are expecting a much better holiday than we have seen in the past. What I am seeing so far is that we may be being too conservative. The results are suggesting that the growth will actually be closer to 20 percent when all is said and done. But, wanting to be realistic, I think if we hit 15 percent, we’ll be blowing the roof off already,” Wargo said.
CES will be held in Las Vegas, January 8-11.
