Forecast : Electronics sales to top $155 billion

Tribune staff reporter

We love our gadgets. And it looks like we will be spending more money on them this year even as prices for products will continue to come down.

In its annual forecast, the Consumer Electronics Association said Saturday that sales of consumerelectronics will increase 7 percent this year, exceeding $155 billion.

The CEA released the outlook to coincide with the opening of the 2007 International Consumer Electronics Show this weekend in Las Vegas.

But as consumer electronics, particularly items like digital cameras and DVD players, become commonplace in American homes, the amount consumers pay for products continues to slide. Prices for digital cameras with less than 4 megapixels of resolution, for instance, dropped by 40 percent in 2006, said Sean

Wargo, senior industry analyst for the Consumer Electronics Association, during a press conference Saturday in Las Vegas.

Wargo also noted that 2007 could be the first year that high-definition television sets outsell standard TVs at the nation's retailers. "Sales will be almost equivalent with standard TVs, but itshould skew a little higher toward high-def," he said.

In 2006, overall sales for consumer electronics surpassed projections to top $145 billion, CEA President Gary Shapiro pointed out in a press release issued before the event. Last year on the eve of the CES show,the association predicted 8 percent growth but industry sales actually grew 13 percent by year-end.

"With the 2007 forecast, we see the consumer love affair with technology continuing at a healthy clip," Todd Thibodeaux, a senior vice president with the CEA, said in the same release. The biggestwinner: TVs. "The successful ongoing transition to digital televisionis driving this market."

Indeed, the association predicts TVs, or what it calls display technologies, will account for $26 billion in sales this year.

Sales of gaming consoles-such as the Playstation 3, Xbox 360 and Nintendo Wii-should increase by 23 percent to total $16 billion.

Mp3 players, led by the ubiquitous iPod, will account for 90 percent of the sales in the portable entertainment category. The CEA said 34 million mp3 players were shipped in 2006 with 41 million expected to shipthis year. Sales should total $6 billion, the CEA said.

Mobile electronics, including GPS navigation devices, is expected to total $1 billion in sales. Three million GPS units are expected to ship in 2007, up sharply from the 2 million shipped in 2006.

Other big categories will be digital cameras, laptops and, in general, gadgets that are easy to carry.For laptops, which first eclipsed sales of desktop computers in 2005 and continued the trend in 2006, prices should stabilize this year, Wargo said during the press conference.

The new Windows Vista operating system, which is expected to ship on consumer PCs later this month, will create demand for new laptops.

Wargo also added fuel to the notion that Apple Computer Inc. will release a mobile phone on Tuesday that will double as an iPod.

"There were about 120 million handsets (phones) shipped to the U.S." last year, he said, noting that they are loaded with cameras and mp3 players. He said such portability to take content with you whereveryou go, what he called "anywhere tech," should continue to explode in popularity.

Several manufacturers, including Sony Ericsson and Schaumburg-based Motorola Inc., areexpected to make announcements at CES as soon as Monday regarding new music phones in an effort to blunt what analysts have called a huge impact on the market if Apple releases a mobile phone.

Yet, it is high-definition televisions that are still expected to provide much of the product sales this year. Prices should continue to trend downward, Wargo said, but retailers can make up the differencewith services.

Wargo pointed to data that showed 44 percent of people who buy HDTVs and other home theater equipment want some form of installation services for their high-end products. Another 35 percent said they would like interior design help as well.

But 69 percent of people, and these are consumers who already bought an HDTV, don't know where to get such help with such services.


Look for Consumer Electronics Show updates from technology reporter Eric Benderoff at

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