The reason for the strongly upbeat atmosphere on the floor at this first CES of the new millennium can be found in the sales estimates for the closing year of the past century, released during the show by the Consumer Electronics Association. Those figures, based on a consensus of CEA member estimates collected by the association’s Marketing Services Department, indicate industry factory sales last year topped the $80 billion level for the first time.
That sales total represents an increase of 6%, or a whopping $4.5 billion, from 1998. Translated to retail, the figures indicate dealers raked in between $10 billion and $15 billion more in 1999 than they did the year before, and CEA’s outlook for next year is nearly as strong.
As for the growth — a four-year high for the industry in terms of both percentage and absolute dollar gains — just under half of that came from Video, a category that had been something of a sleeper throughout the mid-’90s.
Most of video’s $1.95 billion factory value increase came from the surging demand for DVD players, with big-screen color TV, TV/VCRs, camcorders and direct-to-home satellite systems making lesser but still significant contributions.
Home Information Products was the second-fastest growth area, reflecting continued strong demand for home phone equipment, and computer peripherals and accessories. Price erosion trimmed the contribution to the sales performance of PCs themselves.
The Electronic Game category also turned in a solid performance despite the console price cuts by Sony and Nintendo.
The only area of negative growth was in the Home Audio category, as ongoing price erosion cut down the contribution from portable products, while market demand continued to decline for component and component systems.
For 2000, CE said, the outlook is for an overall factory-level sales increase of 5.3%, or nearly $4.3 billion, with the help of even larger gain contributions from the Home Information Products, Mobile Electronics and Electronic Games sectors.
In the apparent expectation of further price erosion, and the possible arrival of the adverse impact of digital TV on the market for high-end analog TV, the Video outlook is for a scant 2.8% dollar sales increase, while Home Audio is seen as being in for yet another down year.