Another Record Year For CE Sales In 2005; '06 Forecast Bright

By Staff On Jan 30 2006 - 8:00am

Last year was one for the record books in terms of consumer electronics factory sales, according to figures released at International CES by show sponsor, the Consumer Electronics Association (CEA). The CEA's estimate, based on a consensus of numbers provided by member companies, is that 2005 sales jumped a strong 11.5 percent to $125. 9 billion. Healthy growth is expected for 2006, with CEA forecasting a 7.5 percent sales hike, to $135.4 billion.

As shown in the accompanying chart, the overall sales growth is being driven by a combination of increasing demand for today's new generation of digital video, audio and mobile products which are being offered at ever more affordable prices.

In the video product arena, digital TVs are moving more and more into the sales mainstream, with flat-panel plasma and LCD models setting the growth pace. The impact of digital video growth is more than offsetting falling sales of analog color and VCRs, while DVD combinations are offsetting the sluggish performance of DVD decks. Total video sales are expected to be up 11.6 percent this year to 25.2 billion.

The growth is all digital in home and portable audio. MP3 players are the sole product to show ongoing improvement as consumer demand for traditional stereo systems and components, tape recorders, players and home radios is slumping. For 2006, home and portable audio sales are forecast at $7.7 billion, up 6 percent.

Cellular phones are seen representing 64 percent of the mobile electronics market this year, and account for most of the category's anticipated 12.4 percent sales growth to $25.1 billion. Rising demand for in-car navigation and video equipment will be a contributing factor.

The industry's other major growth category is video games, as the introduction of new consoles by Sony and Nintendo and sales of related software for them, as well as for Microsoft's Xbox, are seen driving 2006 sales growth by 22.8 percent to $14.3 billion.

Single-digit percentage increases are being forecast for recording media, accessory and home security, while the 2006 outlook for home information is for a slight decline.

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