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CEA Sees A Second-Half Turnaround

New York — The Consumer Electronics Association (CEA) is hoping for a turnaround in CE industry sales, but it still sees challenges ahead.

CEA is projecting 1 percent growth in the third quarter and 1.5 percent growth in the fourth quarter for CE sales, and said its industry advisors predict that for the entire year sales will be down by 0.5 percent. However, they expect 2.9 percent growth in 2010.

In a survey of its CE Advisory Panel in April they estimated sales will bottom during this quarter (almost 30 percent), with about 20 percent saying the third quarter.

In its Mid-Year CE Market Update, presented at the CEA Line Show here June 10, CEA reviewed the flat-panel TV business. The report confirmed what individual manufacturers, distributors and retailers have been saying recently, namely that everyone is keeping lean inventories, unit shipments are up, but maintaining revenues compared to the previous year are hard to come by.

Consumers are now trading down in flat panel, the report shows. At the start of 2008 LCD TVs larger than 40 inches accounted for more than 50 percent of shipments. Today only 39 percent of shipments are more than 40 inches.

In reviewing individual product categories, CEA sees an opportunity for home audio in soundbars, whose unit shipments have shown consistent growth since September 2008.

However single-CD car stereo unit shipments continue to plunge downward through April compared with 2007 and 2008. The opportunity in aftermarket in-vehicle technology is in portable navigation, which CEA projects as a $4 billion market this year and rising the next two years.

Two up-and-coming categories are e-readers, and netbooks and mini notebooks. CEA is estimating that 1.127 million e-reader will be shipped this year and by 2012 6.46 million will be sold that that $99 prices for e-books is possible by then. Screens that are larger, in color and have touch capabilities will become more popular and may also feature video and animation.

And CEA says netbooks and mini notebooks may be in a “sweet spot” for today’s economy based on price ($240 to $499 for netbooks and $399 to $599 in mini notebooks). More manufacturers are entering both categories, which should result in more innovation and product differentiation.