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CEA Forecast: Home, Portable Audio Sales To Slide

Combined factory-level sales of home and portable audio will slip 3 percent to $5.58 billion in 2000 despite growth in shelf systems, headset portables and home-theater-in-a-box (HTiB) systems, CEA’s annual forecast shows.

If the forecasts are borne out, combined home/portable sales will decline for the second consecutive year and for the fourth year in the five-year period starting in 1996.

CEA blames the expected decline on drops in sales of home components, boomboxes and rack systems.

The portable and home categories will both post declines, the association said. Home audio sales (components, shelf and rack systems, HTiBs and home radios) will slip 1.1 percent to $3.84 billion, while portable sales will drop 7.7 percent to $1.76 billion.

In addition, CEA forecasts:

  • The first annual decline in home system dollar sales (shelf and rack systems combined) after three years of gains. Separately, shelf systems will post a single-digit gain.
  • And the sixth consecutive year of declining home-component sales.

Here’s a category-by-category breakdown of CEA’s unit and dollar sales forecasts for 2000:

Components: Home audio component sales will decline for the sixth consecutive year, this time by 1.6 percent to $1.5 billion compared to 1999’s estimated decline of 2.6 percent to $1.53 billion.

CEA statistics also show that for the 10 years from 1990-1999, home component sales rose only during three years — 1990, 1993 and 1994– and only by a little more than 3 percent in each of those years. During 1997-1999, annual sales were off only 2.6 percent to 2.7 percent. The biggest declines occurred in 1992, 1995 and 1996, when sales fell 12.1 percent, 13 percent and 11 percent, respectively.

Rack, shelf systems: Combined sales of shelf and rack systems will slip 0.2 percent to $1.78 billion compared to the previous year’s estimated 1.3 percent gain.Unit sales, on the other hand, will climb by 4.7 percent to 11.1 million units, but the unit gains won’t match 1999’s estimated unit growth of 13.3 percent to 10.6 million.

The average factory-level system price will slip 4.7 percent to $161 in 2000 compared with an estimated 1999 drop of 10.7 percent to $169.

In breaking out shelf and rack system sales, CEA forecasts a 2000 shelf-system gain of only 2.1 percent to $1.67 billion, compared to 1999’s estimated gain of 5.1 percent to $1.64 billion. The slowdown in unit growth will be more dramatic, with unit sales of shelf systems rising only 5.5 percent to 10.9 million compared to 1999’s 15.1 percent unit growth to 10.3 million.

The average factory-level shelf-system price, however, won’t fall as much as it did in 1999, when the price slipped 8.6 percent to $159. In 2000, CEA forecasts a 3.1 percent drop in the average price to $154.

Rack system sales aren’t nearly as healthy as shelf system sales and will continue their double-digit decline in units and dollars, according to the forecast.

This year, dollar sales of rack systems will fall 26.8 percent to $104 million on a unit sales drop of 26.2 percent to 192,000. That compares with 1999 dollar volume that dropped 29 percent to $142 million and unit volume that dropped 29.2 percent to 260,000. The average 2000 price is forecast to be $544, down 0.4 percent, compared to 1999’s 0.2 percent gain to $546.

HTiB: Another year of modest dollar gains is in store. Dollar sales will rise 3 percent to $239 million on a unit sales gain of 5.6 percent to 880,000. In 1999, estimated dollar sales were up 3.6 percent to $232 million on a unit gain of 6.3 percent to 833,000. The average 2000 price will drop 2.5 percent to $272 compared to 1999’s estimated drop of 2.4 percent to $279.

The category consists of receiver/ speaker and electronics/speaker packages that include all of the speakers needed to create a home theater system.

Home radios: The growth spurt will come to an end after several years. In 2000, dollar sales will drop 6.1 percent to $324 million, compared to 1999’s estimated 15 percent rise to $345 million. Unit sales will also slip, falling 0.5 percent to 19.1 million compared to 1999’s 2.4 percent gain to 19.2 million. The average price will fall 5.6 percent to $17 compared to 1999’s 5.9 percent gain to $18.

Portable audio: Combined sales of boomboxes and headphone stereos (excluding solid-state Internet audio portables) will slide 7.7 percent to $1.76 billion. This year’s performance, however, will be an improvement over 1999, when dollar sales were estimated to drop 11 percent to $1.91 billion.

In units, combined sales will drop 2.2 percent to 43.9 million in 2000 compared to 1999’s 1.5 percent drop to 44.9 million.

As in 1999, headphone stereos will increase their share of the portable market in 2000 in both units and dollars. In dollars in 2000, portable headset sales will rise 2 percent to $1.03 billion, while boombox sales will drop 18.5 percent to $737 million.

In units, headphone portable sales will drop 0.8 percent in 2000 to 27 million, while boombox unit sales will drop 4.5 percent to 16.9 million.

In 1999, boombox sales fell 17.5 percent in dollars to $904 million and 5.1 percent in units to 17.7 million. Headphone portables, in contrast, slipped only 4.2 percent in dollars to $1.01 billion in 1999 and by 1.1 percent in units to 27.2 million.

In 2000, the average price point of a headphone portable will rise 2.7 percent to $38 compared to 1999’s estimated drop of 5.1 percent.

In breaking down portable sales by format, CEA forecasts unit and dollar declines in cassette portables, dollar declines in CD portables, and unit sales gains in CD portables.

In the portable cassette format (cassette headphone stereos and cassette-only boomboxes), CEA expects 2000 sales to drop 8.7 percent to $388 million on a unit sales decline of 6.9 percent to 17.9 million. In 1999, cassette portable sales dropped 18.8 percent to $425 million on a unit sales decline of 11.6 percent to 19.3 million.

Sales of headphone CD players and CD boomboxes will drop 7.4 percent to $1.38 billion on a unit sales gain of 1.3 percent to 25.9 million. In 1999, portable CD sales fell 8.6 percent to $1.49 billion on a unit sales gain of 7.9 percent to 25.6 million.