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Varied Outlook for Holiday PNDs

New York – Retailers are taking a mixed
stance in pre-holiday-season buying for portable GPS devices, a category that is
expected to gain somewhat in units but fall in dollar sales to consumers this
year, compared with 2008.

Some retailers, such as Sixth Avenue Electronics, said
they will be cautious in buying portable navigation devices (PNDs) for the
holidays, while others, including Electronic Express, are buying more
aggressively. Car Toys described its buying as “not cautious.” 

Overall, PND sales are expected to gain by about 8
percent in units this year over last, and decline roughly 16 percent in dollars
due to falling prices, according to TomTom.  Average selling prices are down by
about 25 percent from last year, said the company.

Looking at sales through August of this year, The NPD
Group said unit sales to consumers are up by 6 percent but down in dollars by 21
percent. 

Suppliers are offering price promotions for Black
Friday that will place a top-brand PND at a $69 street price (compared with a
general $99 last Christmas) with off-brands falling as low as $49, said industry
sources.

 “We’ll be buying aggressively. We still think the
demand will be there. Not everyone can afford to have a smartphone,” said Abe
Yazdian, Electronic Express merchandising VP, noting that the store is targeting
a 60- to 75-day PND supply, where last year it ordered for a 90-day stockpile.

Sixth Avenue Electronics mobile
electronics director Don Barros said, “We are being more cautious on both
in-dash and portable,” but also noted that “this year will be a difficult one to
predict.”

Ironically, it may be suppliers that suppress the
buying this season, given that retailers were left with huge overstocks after
last Christmas.

Andy Frankel, business development and operations VP
for GPS supplier Nextar, explained, “I think this year is going to look
artificially bad because last year was artificially good. There were so many
[wholesale] sales last year that retailers spent the first six months of the
year selling through the stuff from last year.”  He added, “When a retailer
comes in with an order that’s really aggressive, we’re almost in sales
prevention mode. We took back more inventory than we wanted to [from last year],
and I know my competitors did as well. Defensive sales and defensive buying are
going to curtail the market. The economy is getting better but it doesn’t look
like it will rebound strongly until next year.  But if it rebounds a little and
people buy better than anticipated, I think everyone will be okay.”

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