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CEA Issues Upbeat Forecasts For 2007-08

Arlington, Va. — New sales and forecast figures from the Consumer Electronics Association (CEA) show that 2006 was a modestly better sales year than estimated in the original data the association released at International CES in January.
 CEA also upwardly revised its forecast for this year and gave the first look at what it expects to be record industry sales for 2008.

CEA put its final sales total for the value of most industry product sales to dealers last year at a record $148.1 billion, up 14.9 percent from 2005, and a moderate improvement on the 13.1 percent growth it estimated as the year ended. For this year, it expects sales to be up 8.2 percent to a solid $160.3 billion, as opposed to the prediction of a 6.5 percent rise to $155.2 billion it was looking for in January. As for 2008, CEA’s forecast is for a more modest 6.1 percent rise in overall industry volume to nearly $171 billion.

The figures are compiled by CEA’s marketing services department from actual sales and sales estimates provided by reporting members. It should be noted that the sales gains are moderated by the sharply falling demand for traditional analog products and the actual and anticipated slippage in the pricing of new digital products.

For unexplained reasons, CEA has departed from its long-standing practice of making by-product sales and outlook figures available for publication, as shown in the accompanying table. It instead has withheld detailed data in favor of, for the most part, offering results for groups of similar products.

Compiling CEA’s figures to match the revised master product category roster utilized by CEA for the first time at the start of the year, indicates that consumer electronics enhancement products, a group that includes all accessories, plus blank media and batteries, was the industry’s growth leader last year, as sales soared by 29 percent to just over $19 billion from the 14.9 billion of 2005. But that growth is expected to be a more moderate 8.8 percent this year to just under $21 billion, and increase of 5.8 percent in 2008, to just under $22.1 billion.

The industry’s largest category, in-home technologies, which covers all home-use A/V, communications and computer products, had an indicated sales gain of 7.6 percent last year to $72.2 billion, and is looked to for a rise of about 6.4 percent to some $76.8 billion in 2007. Due in part to the anticipated all-but-vanished sales of analog video equipment and the continued decline in dollars generated by traditional analog hi-fi systems, the sales gain for 2008 is seen as being held down to just over 4 percent, with volume coming in at slightly over $80 billion, including the first volume sales to consumers of digital-to-analog TV broadcast converters.

In-vehicle technologies, getting a major boost from growing aftermarket demand for satellite radio, mobile video and navigation equipment, was seen with a solid 25 percent volume increase in 2006 to almost $9.9 billion. But likely because more new cars will come with advanced technology products installed, growth is expected to be held to just under 14 percent this year to $11.2 billion, and rise by just over 12 percent in 2008 to about $12.6 billion.

The industry’s remaining category, anywhere technologies, housing digital cameras, camcorders, portable audio, portable communications and electronic gaming products, is estimated to have had a sales gain of 21 percent to just over $47 billion last year. The outlook for 2007 is for a rise of nearly 9.5 percent to $51.6 billion, and a 7.7 percent gain to $55.6 billion in 2008.

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