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CE Sales To Fall 7.7% In '09: CEA

7/20/2009 10:38:11 AM Eastern

Arlington, Va. - Consumer electronics shipment revenues
for 2009 will dip 7.7 percent to $165 million, the first decline since 2001.

New data released by the Consumer Electronics Association (CEA)
in its semi-annual U.S. Consumer Electronics Sales and Forecast shows that while
industry revenues will contract in 2009, sales will grow slightly in 2010.

Consumer demand for CE products remains high, but several market
forces are contributing to lower revenues, including lower consumer spending,
price declines and compositional shifts in key product categories, CEA said.

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As consumer confidence rebuilds, industry revenues will grow,
albeit at a pace of less than 1 percent in 2010. CEA's forecast projects
industry revenues will bottom out by the second half of 2009, although many
risk factors remain, causing industry growth to remain muted.

The CE industry continues to hold up favorably compared with
other industries, CEA said. Despite the worst recession since the Great
Depression, CE spending as a percentage of all durable goods is as high as it
has been in 50 years. Vehicle sales are down 40 percent since the recession
began in the fourth quarter of 2007, according to Autodata, and existing home
sales are down 34 percent from their peak in August 2005, according to the
National Association of Realtors.

"The CE industry is not impervious to the economic downturn but
remains resilient compared to other industries," said CEA president/CEO Gary
Shapiro. "Through innovation and global access to consumers and open markets,
technology companies will restore economic growth and prosperity. American
consumers continue to purchase CE products despite cutting back in many areas,
showing that consumer electronics are vital to everyday life in this country."

Digital displays continue to be the primary revenue driver for
the industry, comprising 15 percent of overall industry sales. Unit shipments
of displays remain robust, projected to be up 8 percent in 2009. LCDs remain
the display of choice for consumers, with unit volumes jumping 24 percent.
Lower price points and an increase in consumer demand for midsized displays are
reducing revenue. TV display shipment revenues are expected to drop 6 percent
this year to $24 billion.

One year after emerging as the next-generation DVD format of
choice, Blu-ray players are poised for growth in 2009. Unit shipments of
Blu-ray players will jump 112 percent this year, reaching nearly 6 million.
Even as prices drop, revenues are expected to top $1 billion, an increase of 48
percent over 2008.

Continued innovation in the smartphone category is leading to
high consumer demand and increased shipment revenues. Smartphone shipment
revenues will increase almost 3 percent in 2009, to nearly $14 billion, despite
declines in average unit prices. Smartphones will account for one in four total
handset sales this year as consumers continue to seek devices capable of
Internet access, navigation and media playback while on the go.

CEA's updated sales and forecast also shows netbook momentum is
building within the PC category. Unit shipments are forecasted to nearly double
in 2009, rising 85 percent, to 8.5 million units. Even as more consumers opt
for lower-priced netbooks, the category will reach $3.4 billion in revenue in
2009.

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