In tough times, consumers buy electronics, according to a recent study by the Consumer Electronics Association (Arlington, VA; www.ce.org). The group, more commonly known as CEA, recently finished its semi-annual U.S. Consumer Electronics Sales and Forecast and as a result, increased its projection for 2008 shipment revenues by $2B. CEA now projects the electronics industry will see CE shipment revenues top $173B in the United States in 2008, with a continued growth of 7.3% to more than $183B in 2009.

Steve Sechrist
Senior Analyst and Editor

CEA President and CEO Gary Shapiro claims the consumer electronics segment is a bellwether for the US economy. He went so far as to call the CE industry a backbone of economic activity in this country. "In a tough economy, consumers turn to CE products for many reasons — from entertaining in the home to telecommuting to save gas," he said. "Consumers don’t want to live without CE products and continue to crave the latest gadgets and innovations our industry has to offer."

Leading the way are digital displays, with shipment revenues approaching $28B. DTV shipments represent 16% of all CE shipment revenues. With the switch to digital television occurring on February 17, 2009, unit sales for digital displays will accelerate, climbing 24% this year, while retail prices will fall by 11%, according to the group.

To get an idea of just who is buying these devices, and perhaps more importantly, why, we turn to a study by Forrester Research (Cambridge, MA; www.forrester.com). The company just finished its "North American Technographics Benchmark survey," which it calls the "largest ongoing survey in the world to explore consumer attitudes, ownership, and use of technology."

According to the Forrester report, future device purchase intent is low: "Barely 10% of consumers plan to buy new devices in the next six months." Fortunately, 10% represents a very large number, so sales of HDTVs will continue to grow, but it does throw some water on Shapiro’s "backbone of economic activity" comment, though.

HDTV adoption is 28%, just crossing the "emerging technology" threshold of 25% used by Forrester. The report goes on to say that among HDTV owners, 37% use LCD, 17% PDP and 15% RPTVs.

Internet and mobile activity is ramping up, including reading blogs and texting with the younger generations leading the way.

Some analysts believe the availability of digital content delivery via the Internet, as well as all the new options available on CE devices, are driving the growth in CE device sales, even in these dismal economic times. If you factor in Gen Y, "truly the first native online population," according to Forrester’s Golvin, who live and die online with technology deeply embedded in everything they do, coupled with the move from analog to digital broadcast, it’s reasonable to think that CE is, indeed, the backbone of economic activity in this country.

Then again, the strong CE revenue could just be pent up demand for that fancy new flat screen - and the stimulus check sent out to rescue the economy. You decide.