Home Theater Sales Post Record Year

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The industry enjoyed another record year for home theater-class video and audio equipment sales in 1999, according to figures just issued by CEA.

For the year, factory sales of home theater products were valued at $9.55 billion, up 11% from the $8.58 billion of 1998, as video shipments rose 12% to $8.68 billion, despite a decline posted for Hi-Fi VCRs. Audio equipment sales were up 3% to $866 million from $842 million.

In the fourth quarter, total sales were up 15% to $3.04 billion, paced by a 16% rise for video products to $2.77 billion. Sales of audio equipment were up by 4% to $265 million from $254 million.

In video, DVD players came into their own as a dollar generator in the fourth quarter and fell just $6 million short of passing Hi-Fi VCRs as the sector's third largest category. With the rate at which VCR prices have been declining and DVD unit sales are growing it is certain that DVD player sales dollars will surpass those of Hi-Fi VCRs this year, and they could do so as early as the first quarter.

But DVD players also are subject to some serious price erosion, as would be expected for a product just moving into the mass market arena.

CEA figures indicate that in the fourth quarter the average price of a DVD player fell 8% to $251 from the $273 of the third quarter and was down 29% from the $354 of the same 1998 period. For the year the average price of a DVD player dropped 28% to $270 from $377.

Pricing on projection TVs also declined but at a lesser rate. The fourth-quarter pricing average of $1,288 was off 2% from the $1,311 third-quarter average and down 20% from the $1,611 average for the fourth quarter of 1998. The year's average price was down 10% to $1,326 from $1,474.

In audio, CEA reported, sales of A/V receivers, separates and amplifiers rose 7% in the fourth quarter. For the year, the industry's best seller -- surround-sound receivers -- had an 11% growth, while home-theater-in-a-box speaker systems logged a 3% rise.

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