Sales Growth Rates Slow For Notebooks, Other Categories

PORT WASHINGTON, N.Y. — PC notebook retail sales growth began to show signs of slowing down during this year's back-to-school season, according to The NPD Group's weekly point-of-sale data.

For the five weeks from July 15 through Aug. 18, considered the beginning of the season, notebook sales were said to have been up 24 percent in units and 11 percent in dollars, while the average selling price was down 10 percent. During the same period last year, the category's sales saw a 48 percent increase in units and a 15 percent increase in dollars with the average price down 22 percent.

The group pointed to marketing moves among retailers and decreased shelf-space growth rates as possible factors contributing to the decline in growth for notebooks. NPD cited Fusion data that said notebook PC promotions were up only 12 percent during the beginning of this season compared to the 37 percent increase seen in 2006. It also noted that while notebook shelf-space increased 7 percent over last year, the number is still down significantly from 2006 when shelf space had increased 44 percent over 2005.

The research firm noted the notebook sales anomaly as part of larger trend. In a release, it said most other consumer technology categories are also experiencing slower growth rates. Other categories enduring similar sales deceleration rates, according to NPD data, are notebook accessories, external hard drives, USB flash drives, notebook mice and MP3 players (see table, below, for details).

"We've hit a ceiling across most categories — economic issues, market saturation, and changes in consumers' shopping habits have impacted sales. Price is also a factor. [Prices] aren't coming down as fast as in prior years, and even though consumers still have the ability to get a great deal, they are less inclined to buy a new notebook PC to replace last year's model because the deals aren't as enticing," said Stephen Baker, NPD's industry analysis VP.

While notebook sales slowed, other categories cratered.

For instance, the 30-inch and smaller TV category saw sales drop 42 percent in units and 31 percent in dollars during the period this year compared to a decline of only 8 percent in units and a 7 percent dollar decline during the period in 2006. Average selling prices in the category were also up 18 percent this year compared to only one percent last year.

Even MP3 player accessories are taking a hit. The category, whose sales in both units and dollars were up a whopping 50 percent and 46 percent during the beginning of the back to school season last year, saw sales drop 4 percent and 9 percent respectively this year. Average selling prices on MP3 player accessories actually dropped 5 percent this year, though they had only declined 3 percent for the back-to-school period in 2006.