CEA Projection Tough 2002 For PCs, Printers

Arlington, Va.— The Consumer Electronics Association projects that shipments of the staples of the computer hardware industry, PCs, printers and monitors, will suffer this year, but the software category will post significant gains.

Software is expected to be a bright spot for the industry in 2002 with $5.7 billion expected to ship, up from the $5.1 billion last year. According to the CEA the software segment has increased shipments each of the past five years. Software sales last year were boosted by the introduction of Windows XP, which quickly became Microsoft's hottest operating system introduction surpassing sales of Windows 98 and Millennium.

Digital cameras are also expected to show robust growth with almost 7.5 million units shipping to retail this year for a factory value of $2.3 billion. This is up from the 5.5 million that shipped in 2001. The average selling price of these devices will fall to about $320, according to CEA. The association did not have a home penetration rate for this category.

Clobbered by the double hammer blows of the economic slowdown that hit the high-tech industry early last year and after the Sept. 11 terror attacks, PC sales in 2001 fell to levels not seen since the early 1990s and are expected to stay flat this year. CEA estimates that 14.4 million PCs shipped last year, down 3.4 million from 2000. The total dollar value for the category was at $12.9 billion for 2001 and will drop to $12.3 billion as the average selling price for a system falls from $900 to $855, including monitor.

Despite these changes the home penetration of PCs continued to inch up with CEA stating that 60 percent of U.S. households now own a computer, up 2 percent from 2001. The CEA includes the normally more expensive notebook computers in this category, which boosts the average selling price.

Printer shipments are expected to decline to 20.3 million this year, up from the 18.8 million shipped last year. This increase will generate about $4.8 billion in sales, down from the $5.2 billion posted in 2001. The decrease is due to the drop in average selling price to $250 from $279. The high-attach rate between PCs and printers has helped boost the home penetration rate of this category up to 57 percent.

Aftermarket monitor shipments, which have been on a roller coaster ride for the past several years, are expected to rise up to 5.8 million units this year compared to the 5.1 million shipped in 2001. Factory dollar value of these shipments will hit $1.2 billion. Monitor selling prices will continue their upward trend this year inching up to $285 from $280. This increase can be attributed to the mix of low-cost LCD monitors at retail.

After two straight years of flat sales, CEA project modem shipments to rise to 12.5 million from the 1.6 million units shipped in 2000 and 2001. These shipments will generate $1.4 billion in revenue, down from the $1.6 billion the previous year. Again, falling average selling prices will be the cause for this shrinkage. Reflecting importance of having a fast Internet connection, the home penetration of aftermarket modems hit the 56 percent point this month, according to CEA, up from just 38 percent in January 1999.

All other computer peripherals, such as scanners and home networking equipment, are expected to enjoy a healthy 2002 with unit shipments growing to $2.4 billion, up from the $2.1 billion shipped last year.