Parks Associates Blog

Saturday, November 13, 2010

Q&A: What to expect for consumer electronics shopping this holiday season?

What are we expecting from consumer electronics sales this holiday over last?
  • Consumers are feeling more confident in their CE spending. A higher percentage of broadband households expect to spend more in 2010 on consumer electronics than last year.
  • Based on a released study Consumer Decision Process – 2010 3Q Summer Updates, a total of 68% of U.S. broadband households made at least one CE hardware purchase between January 1 and mid-August, a rate 10% higher than that tracked for the same period in 2009.

What devices/companies will drive advertising spending for consumer electronics this holiday season?

The major consumer electronics brands – from Sony, Samsung, LG, VIZIO and the like – will drive foot traffic at retail simply because of the advertising they are doing for 1) 3D TVs and 2) connected TVs. We expect Sony’s Google TV and Logitech’s Revue (also a Google TV product) to capture at least attention, if not overwhelming sales.

Why, during the depths of the recession, were people still willing to pay out for expensive CE devices such as HD TVs?

A big trend was consumers pulling back on outside-the-home entertainment (dining, movies, theater, etc.) and thinking of ways to “cocoon” and bring entertainment home. In many cases, consumers view the purchase of a large HDTV and/or a home theater system as a cost-saver, because it allows them to recreate the sights and sound of the theater without the expense. Add in an $8.99 Netflix subscription with unlimited streaming – including HD content – and consumers really feel like they’re getting a value. I think that smartphones are success for many reasons, but one key thought is that for the on-the-go consumer (younger, or older heavy business traveler), that smartphone augments or outright replaces multiple devices for communications, entertainment, and Internet access. So, in a sense, it could almost be considered a cost-saver.

What do you expect from the iPad - how much will sales kick up during the holiday compared to earlier this year?

We expect strong sales of iPads to cut into sales of netbooks and mid-range laptop computers. iPad has expanded its retail channels (e.g. Target, Verizon), and the supply issue that bottlenecked iPad sales during the summer is history. So we are going to see higher rate of iPad sales in 4Q compared with 3Q10 for Apple.

What will be some other hot consumer electronics buys?

  • smartphones
  • e-Readers
  • iPads and other tablet computers
  • Roku Video Players
  • Apple TV
  • Products such as the Western Digital WD TV Live Hub
  • Kinect/Xbox 360 and PlaystationMove
  • digital SLR cameras

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