CEA Issues Upbeat Sales Forecasts For 2007-08

By Bob Gerson -- TWICE, 9/17/2007

ARLINGTON, VA. — New sales and forecast figures from the Consumer Electronics Association (CEA) show that 2006 was a modestly better sales year than estimated in the original data the association released at International CES in January. CEA also upwardly revised its forecast for this year and gave the first look at what it expects to be record industry sales for 2008.

CEA put its final sales total for the value of most industry product sales to dealers last year at a record $148.1 billion, up 14.9 percent from 2005, and a moderate improvement on the 13.1 percent growth it estimated as the year ended. For this year, it expects sales to be up 8.2 percent to a solid $160.3 billion, as opposed to the prediction of a 6.5 percent rise to $155.2 billion it was looking for in January. As for 2008, CEA's forecast is for a more modest 6.1 percent rise in overall industry volume to nearly $171 billion.

The figures are compiled by CEA's marketing services department from actual sales and sales estimates provided by reporting members. It should be noted that the sales gains are moderated by the sharply falling demand for traditional analog products and the actual and anticipated slippage in the pricing of new digital products.

For unexplained reasons, CEA has departed from its long-standing practice of making by-product sales and outlook figures available for publication, as shown in the accompanying table. It instead has withheld detailed data in favor of, for the most part, offering results for groups of similar products.

Compiling CEA's figures to match the revised master product category roster utilized by CEA for the first time at the start of the year, indicates that consumer electronics enhancement products, a group that includes all accessories, plus blank media and batteries, was the industry's growth leader last year, as sales soared by 29 percent to just over $19 billion from the 14.9 billion of 2005. But that growth is expected to be a more moderate 8.8 percent this year to just under $21 billion, and increase of 5.8 percent in 2008, to just under $22.1 billion.

The industry's largest category, in-home technologies, which covers all home-use A/V, communications and computer products, had an indicated sales gain of 7.6 percent last year to $72.2 billion, and is looked to for a rise of about 6.4 percent to some $76.8 billion in 2007. Due in part to the anticipated all-but-vanished sales of analog video equipment and the continued decline in dollars generated by traditional analog hi-fi systems, the sales gain for 2008 is seen as being held down to just over 4 percent, with volume coming in at slightly over $80 billion, including the first volume sales to consumers of digital-to-analog TV broadcast converters.

In-vehicle technologies, getting a major boost from growing aftermarket demand for satellite radio, mobile video and navigation equipment, was seen with a solid 25 percent volume increase in 2006 to almost $9.9 billion. But likely because more new cars will come with advanced technology products installed, growth is expected to be held to just under 14 percent this year to $11.2 billion, and rise by just over 12 percent in 2008 to about $12.6 billion.

The industry's remaining category, anywhere technologies, housing digital cameras, camcorders, portable audio, portable communications and electronic gaming products, is estimated to have had a sales gain of 21 percent to just over $47 billion last year. The outlook for 2007 is for a rise of nearly 9.5 percent to $51.6 billion, and a 7.7 percent gain to $55.6 billion in 2008.

CEA 2006-08 Sales And Outlook
(Units in 1,000s, $ value in millions)

		2006 Actual			2007 Estimate			2008 Forecast
	Unit Sales	Factory $ Value	Average $ Price	Unit Sales	Factory $ Value	Average $ Price	Unit Sales	Factory $ Value	Average $ Price
Total TVs & Displays (1)	34,408	$24,726	$719	31,862	$26,049	$818	33,637	$26,596	$791
Total Digital Color	23,504	23,380	995	30,462	25,907	850	33,637	26,596	791
Total Analog	10,904	1,346	123	1,400	142	102	--	--	--
Total Video Components (2)	49,030	4,611	94	51,791	5,019	97	55,438	5,646	102
Total Set-Top Boxes (3)	25,835	2,273	88	29,166	2,597	89	31,649	2,923	92
Total Home Audio (4)	17,286	2,794	162	16,367	2,737	167	16,082	2,731	170
Total Home Info. and Security (5)	69,927	37,606	538	73,553	40,532	551	76,784	42,668	556
Personal Computers	24,415	19,275	789	27,345	21,569	789	29,806	23,096	775
Total Home Communications (6)	72,841	2,491	34	70,271	2,507	36	66,154	2,375	36
Total Auto A/V Products (7)	--	8,496	--	--	9,184	--	--	10,233	--
Total Auto Info. & Security (8)	--	1,354	--	--	2,035	--	--	2,377	--
Total Digital Imaging (9)	39,717	9,157	231	42,084	8,851	210	42,822	8,924	208
Total Portable Entertainment (10)	59,558	6,722	113	62,113	6,706	108	64,377	6,672	104
MP3 Players	38,124	5,559	146	41,490	5,400	130	41,956	5,197	124
Total Electronic Games (11)	--	12,875	--	--	15,360	--	--	18,330	--
Total Portable Communications (12)	138,749	18,469	133	148,275	20,728	140	152,596	21,706	142
Total Accessories	282,952	7,459	26	317,151	8,568	27	348,284	9,340	27
Primary Batteries	--	6,155	--	--	6,421	--	--	6,695	--
Total Blank Media	--	5,567	--	--	5,874	--	--	6,039	--
(1) All digital and analog TVs and displays (2) Component VCRs, DVDs and set-top boxes (3) DVRs, DBS and MSO receivers, digital midea adaptors and IPTV (4) Compact, rack and theater in a box systems and radios (5) PCs, peripherals and sofware, typwriters and word processors (6) Phones, answerers, faxes and caller ID devices (7) Aftermarket and OEM autosound, video, satelllite radios (8) Radar, aftermarket security and navigation (9) Camcorders, cameras and picture frames (10) MP3 players and speaker decks, tape recorders and players, headset audio and CD players (11) Hardware and software (12) Cell and smartphones, FRS devices and pagers Source: CEA Market Research ©TWICE 2007