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NPD: Prices Level Off In June

Port Washington, N.Y. — Technology product prices leveled off after five months of declines, according to the latest NPD Consumer Electronics Price Watch.

During the month of June 2004, retail prices for the CE Price Watch market basket of goods fell by less than 1 percent from May and 15.6 percent from June of 2003. These declines were the lowest recorded since the start of CE Price Watch in January 2003. The overall cost of the basket of goods followed by CE Price Watch stood at $12,399 in June. The Price Watch is a monthly pricing monitor providing a top-line look at the average selling price of technology products being sold in the U.S.

“The small selling price decline is a combination of both small price declines from last month and a number of price increases,” said Stephen Baker, The NPD Group’s industry analysis director. “Of the 27 categories tracked, eleven had increases from May pricing levels. The equivalent data in May showed that only 7 products showed month-to-month increases. On a percentage basis, only three product groups delivered more than a 5 percent price decline.”

The percentage leader was 802.11g wireless access points, which fell 10.3 percent from May. This decline is the result of the introduction of enhanced or SuperG products by all major networking OEMs. Blank DVD media fell by 8 percent to under $18 for a 10-pack of write-once media. Prices have been fluctuating in this market, although the trend is unmistakably down since an equivalent 10-pack cost $23.41 last year.

The third largest percent decline was seen in the 32-inch direct-view HDTV, which fell below $900 for the first time. This product has now fallen by nearly one-third over the past eighteen months and 13 percent since January 2004. Large absolute dollar declines were also seen in the 20-inch LCD TV category and the 17-inch LCD monitor category. Prices for those two products fell $31 and $11, respectively.

Price increases during June were uniformly small and manageable. DVD portable players as well as prices on DVD recorders moved higher. Both of these increases were less than 4 percent and represent the normal price movement that occurs as new technology begins to be deployed.

Prices for both of those products, while up on a month-to-month basis, have fallen by over 9 percent since the start of 2004. Portable DVD players are down 36 percent since January 2003 while DVD recorders have dropped 45 percent. The largest percentage gainer for June was the most basic DVD player, which increased 7.6 percent over May.

NPD Consumer Electronics Price Watch is based on 27 of the best-selling product categories in the consumer electronics space, which includes a cross-section of the products people buy and is made up of a “market basket” of the most frequently purchased electronic products, including televisions, PCs, cameras and media players.