Consumers To Cut Their CE Spending: Forrester

By Alan Wolf -- TWICE, 1/5/2009

Cambridge, Mass. — Almost half of consumers will spend less on technology devices this year than last, according to a new Forrester Research report on recessionary spending habits.

PCs will fare worst this year while TVs and home entertainment will hold up best, the study showed. What’s more, people who plan to reduce or put off purchases of CE products spanned all generations, Forrester said, from tech-savvy Gen Y and X consumers to senior citizens.

The report, “Consumer Spending in an Economic Recession,” was based on a survey of over 5,000 consumers conducted at the end of November.

PCs may be the hardest-hit category this year, the survey suggests. Almost half of those who plan to buy a new PC have delayed their purchase while nearly one in five say they will spend less on their next PC in light of current economic conditions.

Also feeling the effects of the spending downturn will be handheld video game players, satellite radios, smart phones and digital cameras. Two-thirds of consumers, regardless of their previous intentions, said that they are less likely to purchase handheld video game players or satellite radios in a recession, while only 3 percent said they are more likely to do so. Nearly two-thirds also said that they would be less likely to purchase a smart phone in today’s economy, given their greater cost.

And while fewer people said that they will put off purchasing their next digital camera compared to PCs and TVs, nearly a quarter of those who plan to buy a camera said they will spend less on it.

Conversely, consumers intend to loosen their purse strings when it comes to home entertainment, TV and mobile devices. Consumers said they are twice as likely to reduce spending on entertainment outside the home as reduce spending on in-home entertainment, while 16 percent said they'll actually spend more on entertainment inside the home in the coming year.

To that end, 44 percent of consumers said they will stick with their plans to purchase a TV this year, and fewer expect to spend less than planned on their TVs compared to their PC or digital camera purchases.

In addition, 7 percent of respondents indicated that they would be more likely to buy an HDTV despite the current state of the economy, tying laptops for the highest intention rate of any device.

Perhaps the most recessionary-resistant product is the mobile phone: half of all consumers said that they would be just as likely, or more likely, to purchase a handset in today’s economic climate.