CE in Growth Mode in a Recovering Economy, CEA Stats Show

June 22, 2010 By Nancy Klosek

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Technology remains a strong contender for consumer dollars in the third and fourth quarters of 2010, despite a weak labor market that has lagged behind the post-recession economic recovery.

That was the assessment offered by Shawn DuBravac, chief economist and director of research for the Consumer Electronics Association, at the opening presentation of the two-day CEA Line Shows event June 22 in New York City.

“We’re at this very delicate handoff as we move into Q3 and Q4 from a stimulus economy to one that needs to be driven by the private sector,” said DuBravac.  Commenting on a possible scenario during the Christmas selling season, he said, “in the back half of the year, we worry about the consumer not being well positioned to receive the baton.”

But that concern could be unfounded, since consumer electronics sales were trending in an upward direction as of March, DuBravac said, with strong unit and dollar sales growth. “A positive for technology is the consumer’s willingness to spend on it. That continues to increase,” he said, noting that when Cash for Clunkers for cars was in force, CE buying dropped, but when it ended, CE spending experienced an uptick.

DuBravac highlighted key trends for a few high-profile categories that indicate consumers are spending their CE-channeled dollars on higher-ticket items.  “A real positive driving that trend," he added, “is the change in composition in products being sold – LED TVs, tablets, mobile smartphones – all good for industry revenue growth” because they are newer technologies and so, are higher-priced.

LED LCD TV sales, just five percent of all TV sales in both January and February, accounted for 11 percent of the TV sales pie in March; he projected that LED TV sales would represent over 25 percent of flat-panel revenue by year’s end.

He noted that 70,000 3D-equipped or 3D-ready TVs, on average, were now shipping to retailers monthly, and that the number shipped would likely fall somewhere in the 2 million to 2.5 million range by the end of 2010 – “a pretty good adoption curve for a new technology,” he said – with 70 percent of the 3D sales volume likely occurring in Q4.

DuBravac cited a June-conducted sales associate survey on 3D that revealed 80 percent of respondents noting a high level of interest in 3D among their customers. However, half said consumers were still confused about the format.