Consumer electronics spending expected to drop by 7.7% in 2009

Arlington (VA) – The Consumer Electronics Association (CEA) has updated its 2009 sales forecast. The organization expects the first annual drop in revenues since 2001, which are expected to be about $165 billion in 2009, down about 7.7% from 2008. However, the decline is due to lower product prices, not contracting unit shipments, the CEA said.

According to the CEA, consumers have not reduced their spending for consumer electronics as much as they did in other sectors such as the automotive industry. In fact, the organization claims that despite the worst recession since the Great Depression, CE spending as a percentage of all durable goods is as high as it has been in 50 years.
Across major categories, the CEA expects a jump in unit sales, while overall revenue will go down. Digital displays are expected to continue to be the primary revenue driver for the industry, accounting for 15% of overall industry sales. Unit numbers are projected to be up 8% in 2009, while LCDs will see a 24% increase in unit numbers, the CEA said. However, lower price points and an apparent increase in consumer demand for mid-size displays are reducing the segment revenue by about 6% to $24 billion.

There is hope that Blu-ray players will see a dramatic increase in popularity. The CEA says unit shipments of Blu-ray players will jump 112% this year, reaching nearly six million. Even as prices drop, revenues are expected to top $1 billion dollars, an increase of 48% over 2008. Smartphones are also gaining traction: The category will bring in about $14 billion in revenues. Smartphones will account for one in four total handset sales this year, the CEA believes.

CEA’s updated sales and forecast also shows the netbook as a growing market within the PC category. Unit shipments are forecasted to nearly double in 2009, rising 85% to 8.5 million units. Netbooks will reach $3.4 billion in revenue in 2009, according to the CEA.