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’02 Digital Gains To Offset Analog Video Sales Declines

DVD video players and digital color televisions proved to be the sales stars in an otherwise disappointing 2001 for consumer video categories, as reflected in CEA’s latest survey of key members issued at the International Consumer Electronics Show.

Factory dollar volume estimates for the overall video segment in 2001 dropped 7.9 percent to $16.9 billion from $18.3 billion in 2000. VCR decks (down 41.1 percent), analog projection TVs (down 28.6 percent) and analog direct-view TV sets (down 22.7 percent), suffered the most from the one-two punch of the nation’s conversion to a digital video system and a recession.

At the same time, DVD video players (up 52.9 percent), digital television sets and monitors (up 83.3 percent) and direct-to-home satellite systems (up 72.1 percent) showed significant growth.

Despite continued economic strains, CEA forecasts overall growth (4.5 percent) in video hardware sales in 2002, when it expects total video hardware sales of $17.6 billion. Category leaders in dollar volume growth are expected to include DTV sets and monitors, DVD players (17.4 percent), and direct-to-home satellite systems (7.6 percent).

The DVD video player category continued to astound industry watchers with its explosive sales growth. Unit sales topped the 53 percent growth mark reaching 13 million separate component players. At the same time, factory dollars climbed 24.9 percent over 2000 numbers to $2.1 billion. This came despite the fact that average retail tickets slid 18.3 percent from $202 to $165.

Projections for 2002 show DVD unit volume climbing to almost 16.2 million units on a 17.4 percent increase in factory dollars to $2.5 billion. Not surprisingly, the average player price is expected to drop another 6 percent to $155 dollars.

Digital television sets and monitors began what most expect will be a long growth curve in 2001. Unit sales topped the 120 percent growth mark reaching 1.4 million. At the same time, factory dollars climbed 83.3 percent in 2001 to $2.6 billion. The average DTV price declined 19.8 percent to $1,835.

CEA estimates the unit growth rate will reach 57.8 percent in 2002 to $2.25 million sets, while factory dollar volume will climb 40.6 percent to $3.67 billion. The average price of a DTV is expected to fall 10.8 percent to $1,635.

Another growth category in 2001 was the TV/PC combination system. Unit sales of TV/PCs were up 16.1 percent to 325,000 units, as factory dollars climbed 9 percent to $748 million. The average system price dropped 6.1 percent.

For 2002, TV/PC sales should grow 3.4 percent to 336,000 units, while factory dollars fall 14.7 percent to $638 million.. The average TV/PC price is expected to be down 17.4 percent to $1,900.

After experiencing a set-back in 2000, unit sales of direct-to-home satellite systems surged 50.2 percent in 2001 to 4.9 million units, as factory sales reached $921 million. Average unit pricing increased 14.6 percent to $188 in the year.

For 2002, CEA said home satellite system sales will increase 15.3 percent to 5.6 million, while factory dollars will reach $991 million. Average pricing is expected to decline 6.9 percent to $175.

Another growth category for the year was color LCD TVs, which saw unit sales jump 21.2 percent to 445,000 pieces on a 16.6 percent increase in factory dollars to $42 million. Average pricing dropped 4 percent to $95.

The segment is expected to continue to grow in 2002 with unit sales increasing 32.6 percent to 590,000, while factory dollars increase 28.6 percent to $54 million on an average retail price of $88.

Factory dollars for set-top Internet boxes rose 1 percent to $195 million, as unit volume increased 4 percent to 1.3 million. The average selling price dropped 2.5 percent to $150.

The outlook for category in 2002 is for 0.5 percent increase in factory dollar volume to $1.4 billion, and a 7.6 percent increase in unit sales to 1.4 million. The average selling price is expected to drop 7.1 percent to $140.

Steadily dropping prices for camcorders failed to keep the unit sales from dropping 8.9 percent below 2000 levels to 5.3 million, while factory dollars dipped 20.8 percent to $2.24 billion. The average price paid for a camcorder in 2001 was $425, down 12.4 percent from a year ago.

The outlook for 2002 is slightly better, however, as CEA projects unit sales to be virtually flat at 5.35 million, while factory dollars nudge ahead 2.3 percent to $2.3 billion. The average price for a camcorder will dip 9.4 percent to $385, CEA said.

The trend is downward for most other video categories, led by slumping VCR deck sales, which continue to suffer from the rise in popularity of affordable DVD players. Sales of VCR decks dropped 32 percent in 2001 to 15.7 million, while factory dollars slipped 41.2 percent to $1.09 billion. Within that segment unit sales for stereo models dipped 14.9 percent while non-stereo models plummeted 50.6 percent. The average price for a VCR fell 20.2 percent in 2001 to $70.

For 2002, CEA projects an 8 percent decline in VCR deck unit sales to 14.45 million, a 13.2 percent decline in factory dollars to $954 billion and a 5.7 percent average price reduction to $66.

In a surprise to many, sales of hard drive-based personal video recorders fell 49.8 percent to 125,000 units, while factory dollars dropped 50.6 percent to $38 million. Average unit pricing fell 16.7 percent to $300. For 2002, CEA forecasts PVR unit sales to rise 20 percent to 150,000, while factory dollars remain flat at $38 million. The average unit price is estimated to drop another 16.7 percent to $250.

Meanwhile, total color television sales fell 9.4 percent to 28.3 million units in 2001, while factory dollars dropped 9 percent to $9.5 billion. The average unit price dropped .5 percent to $337.

Within that, sales of analog models took the biggest hit, with unit sales down 12.2 percent to 26.6 million, and factory dollars down 23.7 percent to $6.83 billion. The average price dropped 13.1 percent to $256.

CEA expects direct view sales to increase 1 percent in 2002 to 26 million units, while factory dollars fall 1.7 percent to $5.7 billion. The average price is forecast to drop 2.7 percent to $219.

Projection television sets were estimated to have fallen 23.1 percent to 935,000 units, on a 28.6 percent drop in factory dollars to $1.06 billion. The average set price dropped 7.2 percent to $1,130.

In 2002, CEA expects unit sales of analog projection sets to drop 35.8 percent to 600,000, while factory dollars decline 42.4 percent to $609 million. The average price per set should be down 10.2 percent to $1,015.

TV/VCR combo unit sales were off 7.9 percent in 2001 at 4.6 million, and factory dollars were down 9.7 percent to $786 million. Average unit pricing dipped 11.8 percent to $172. For 2002, CEA says TV/VCR combos sales will drop another 4 percent to 4.38 million, and factory dollars will fall 9.7 percent to $710 million. The average price should dip 5.8 percent to $162.

CEA 2000-2002 Video Hardware Sales Outlook (Units in 1,000’s, $ value in millions)