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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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