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CEA, TraQline Study Shows Challenging Period For CE Vendors

11/04/2012 07:00:00 PM Eastern

SAN FRANCISCO – After a post-re- cession period of positive trends for CE consumers and retailers alike, 2011 and 2012 brought a unique set of challeng- es to both, mostly stemming from the uncertain economy, according to a Con- sumer Electronics Association (CEA) report based on research by TraQline.

While 2011 saw margins increasing for retailers and prices mostly hold- ing steady, both those trends reversed in 2012. TraQline cited the steady de- crease of real median income as the cul- prit, as average selling prices followed the same downward trajectory.

Consumer spending on consumer electronics dropped by double digits from 2010 to 2011. The average con- sumer spent $652 on CE in 2010 and $552 in 2011, a decline of 15.3 percent, while average household spending on CE, at a healthy $1,179 in 2010, fell 18.5 percent to $961 in 2011.

Many factors contributed to the decline according to the report, titled, "Spend- ing, Shopping and Showrooming: What's Happening Now and This Holiday." Among them, price deflation, feature creep, more bargain hunting among consumers, as well as the rise of software and services at the expense of hardware purchasing.

TVs continue to lead the market down- ward. Whereas TV industry growth rates rose 9.1 percent from 2007 through 2009, at the height of the HDTV transi- tion, a fatigued market declined a whop- ping 25.1 percent from 2009 through 2012, with plummeting average selling prices leading the way.

The explosion of portable comput- ing device sales would appear to have eclipsed the TV category's losses, as the smartphone and tablet revolution drove category sales up 149 percent from 2009 to 2012. Unfortunately, av- erage selling prices continued steadily downward, from just less than $1,000 in 2007 to less than $500 this year.

Highlights from the study, with some in-depth category snapshots appear here through p. 30.

The report was presented at the CEA Fall Forum, here, last month. The full re- port is available at CE.org.

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