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CEA Expects ’04 Sales To Hit $101B

Las Vegas – According to the Chinese calendar 2004 is the year of the monkey, a symbol of opportunity and success. To the Consumer Electronics Association (CEA) it will be a year of recovery as the industry enjoys healthy growth that offsets the impact of the 2001 slump and lifts factory sales to a new record high.

Those are the basics of the consensus sales estimate and forecasts being issued today at the International Consumer Electronics Show by CEA, the show’s producer. The numbers released by the trade group show sales for 2003 at an estimated $96.4 billion, up 2.3 percent from the preceding year to $94.2 billion, and provide a forecast for an increase this year to a historic record of just under $101 billion. That would put sales up 4.8 percent to shatter the previous full-year sales record of $96.4 billion set back in 2000.

While the growth is substantial, the totals do fall somewhat short of the expectations CEA offered up at CES last year. At that time the industry had forecast 2003 sales of $99.5 billion and was looking for 2004 to come in at $103.5 billion.

Over the longer term, CEA sees 2005 sales rising 5 percent to $106 billion. It also is forecasting similar sized increases for the following two years, as factory volume grows to nearly $117 billion in 2007.

CEA pegs Blank Media and Accessories as the leading growth category for 2003, with factory volume rising 8.4 percent to an estimated $9.5 billion on surging sales of recordable CDs and DVD, and rising demand for batteries and accessories. New digital products provided the growth for Mobile Electronics, up 5 percent to $16.8 billion, and Video hardware, up 1.8 percent to $19.1 billion.

Sales of Home Information products are seen to have resumed growth last year, posting a 2.8 percent gain to $33.3 billion. Electronic Game product sales dipped 1.7 percent to $10.9 billion, as rising software sales failed to offset the impact of declining hardware prices. Home Security enjoyed a 4.6 percent sales growth to $2.06 billion.

Not surprisingly, the industry’s biggest sales loser was Home Audio, which registered a 9.6 percent drop in sales during 2003 to $4.62 billion.

For this year CEA expects rising demand for cell phones, navigation systems and factory installed audio to lead Mobile Electronics to a strong 15.1 percent sales jump to $19.4 billion. That is followed by a 6.5 percent gain for Blank Media and Accessories to $10.1 billion, and a 4.2 percent increase in Video sales to $19.9 billion.

As for other product categories, Home Information is expected to have 2.7 percent rise to $34.2 billion and Home Security is seen up 3.3 percent to $2.12 billion. Continuing on the decline, Home Audio sales are expected to slide 3.6 percent to $4.45 billion, while Electronic Game revenue, aided by new consoles, is seen dipping just 0.8 percent to $10.8 billion.