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For many of the shoppers braving the early morning crowds, their target purchase is a large television, with features like 3D technology, high-definition (HD) displays and Web connectivity luring interest. Key to driving sales are low prices offered by manufacturers coupled with aggressive Black Friday discounting from big box retailers such as Best Buy, Walmart and others.
“Price is always the big feature,” Stephen Baker of The NPD Group told USA Today. “We are going to see a lot of aggressiveness and see a lot more [models] in the very large sizes. People are looking for a really big television as they start to upgrade their flat panels.”
A big factor in this year’s forecast of a reduction for consumer electronics (CE) spending, however, is the slowing of the LCD TV space, which accounts for nearly 30 percent of CE revenues. According to an IHS iSuppli Consumer Platforms Market Tracker report from information and analysis provider IHS, LCD TV revenue in 2011 is now anticipated to reach $104 billion instead of $110 billion, although the segment retains “solid momentum” going forward.
“The single most pressing issue remains that of pricing, an ongoing concern in the dollar-conscious CE market. While consumer appetite will remain strong for CE equipment, manufacturers will be increasingly hard-pressed to offer their products at competitive prices,” the report noted. “Eventually, price pressure will outweigh the growing number of pieces of CE equipment, capping CE market revenue in the process and slowing growth to a trickle.”
The consumer electronics space covers a variety of devices, including LCD TVs, and DVD and Blu-ray players, as well as recorders, digital still cameras and portable media players. Other important categories are video game consoles and handheld game players, ebook readers, digital set-top boxes and battery chargers. For most of these categories, IHS has reduced its forecasts to reflect the ongoing economic slowdown in many parts of the world, resulting in revenue projections being pulled back.
While CE revenue in the second and third quarters fell just short of their levels of the same time last year, the trend is beginning to reverse starting in the fourth quarter as holiday sales of televisions and Blu-ray players top their levels from the same period in 2010. By 2015, shipments will reach 300 million units for LCD TVs and 80 million for Blu-ray players. In addition, as the LCD TV space is enduring a reduction in growth, the MP3 market is experiencing an accelerating fall in prospects, as the once ultra-hot systems are now being cast aside in favor of high-profile devices such as smartphones and tablets.