Challenging Q4 Seen, But There Are Opportunities

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What will fourth-quarter sales be like in consumer electronics? What will drive sales? How will it compare with last year?

Jeff Davis, D&H Distributing:

The fourth quarter will be challenging in some areas of consumer electronics. Maintaining inventory will be key, especially due to a reduction of glass production in reaction to the Japanese natural disasters, which may affect tablets, monitors and/or displays.

Black Friday and Cyber Monday are such notable pre-holiday sales occasions, it will help retailers and e-tailers drive sales with bigger and better specials than ever. This year will see week- and month-long Black Friday offers.

Our expectation is that, overall, the season will be as good if not better than last year. Jobs, the budget deficit and gas prices are still a big concern that could influence consumer confidence. But consider that consumers have lower credit card debt right now than they have carried in years, a dynamic that developed in reaction to the recession. We think that could lead consumers to spend for the holidays.

Warren Chaiken, Almo:

Business is going to be challenging in Q4. The economy continues to struggle, consumer confidence remains low, and inventories from some manufacturers will be conservative again this year. As consumers look for more value, high- quality manufacturers will need to come to market with strong promotional offerings to break through that barrier. We expect sales to be flat to 2010, but if the right vendors get very aggressive, increases are possible.

Bill Stewart, Petra Industries:

We are optimistic that the industry will see growth, and think that portable products such as tablets and smartphones will continue to be a big driver for fourth quarter. Just when a consumer thinks he or she has maximized the potential of a smartphone, a new app or accessory comes out that opens up a whole new way to use the device. Our manufacturers are constantly creating innovative accessories — some even developing apps to go with them — that give retailers endless add-on sales opportunities. With the upcoming release of Apple’s iPhone 5 and the Amazon Fire, it is clear that this won’t slow down any time soon.

Jerry Satoren, DSI Systems:

I believe that Q4 sales this year will mirror the same choppy pace we have seen for most of 2011. In TVs, sales will be driven by extreme values and large screen sizes. Aspirational items like tablets will obviously drive sales as well. I believe when all is said and done, the holiday selling season at retail will come in with low single-digit positive comps.

Fred Towns, New Age Electronics:

Fourthquarter sales will probably see single-digit increases. Retailers will see an influx of customers wanting tablets and gaming gesture experiences, like those that Microsoft and Sony offer. As more and more people have all their entertainment on their mobile devices, they will be moving toward better-grade headphones to make their experience more enjoyable.

With the decreased price points of TVs and the still uncertain economy, retailers may see more families upgrade their TVs to create a more fulfilling home entertainment environment vs. going on ski trips during the holidays.

Michael Flink, ADI Americas:

In the custom install A/V market, we are anticipating mid-singledigit growth in revenue for the fourth quarter and approximately 15 percent to 20 percent growth in units. The business appears to be trending upwards as consumer confidence continues to improve and people are spending again. Categories related to 3D content, streaming video and music, as well as connected and Internet TV will help drive sales.

ADI has made steady business decisions to help create new growth opportunities for our dealers and position ourselves for better performance. In early Q4, ADI will be announcing a new vendor that we think will drive a lot of demand and boost sales.

Dennis Holzer, PowerHouse Alliance:

We feel confident with the vendors we have aligned with that we will have a good fourth quarter. Profitability, because of certain necessary price points, specifically in video, will be tight, but if you have the inventory and are willing to compete for sales, they will be there. No doubt as an industry, for this fourth quarter to be successful we have to take risks, be more aggressive and stayed keyed in to what the consumers are looking for.

Unlike past years, I think audio will be much stronger, and speakers will also be strong. iPad will also continue to be very strong. We finished 2010 strong, and sales for year-to-year comparison will be stronger in 2011 when finished vs. 2010.

Jeff Kussard, Capitol Sales:

Connected TVs will drive the display business through the holidays, but don’t expect to see significant growth over 2010. Overall, the main focus will be on products with a personal touch. Tablets and other portable smart devices will be strong, as will the accessories and peripherals that should accompany every sale.

Tim Coakley, Ingram Micro Consumer Electronics:

The success of fourth-quarter sales will primarily be driven by three main categories. Headphones sales are projected to skyrocket due not only to improved technology but also because of the increased use of headphones as a fashion statement. Value-priced flat-panel TVs will also drive sales, especially in the 60-inch and above category due to the new affordability of the larger sizes.

Lastly, due to the overwhelming popularity of tablets, the accessory category will ramp up during the holiday season, especially in the tablet cases and chargers category.

Eddie Lageyre, SED International:

We anticipate Q4 CE sales to bounce back from a soft backto- school season. Tablets, LED TV and notebook PCs will drive sales. We anticipate a slight increase from Q4 2010 holiday sales, hopefully 10 percent growth but realistically high single-digit growth.


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