CES 2009: Lowered Expectations

As John Sciacca pointed out in an earlier post, companies at CES 2009 are under no illusions about the economy. In particular, they know that 09 (and possibly 10, and 11) will be pretty tough sledding, until people have enough money to start going deeply into debt again. (That makes no sense, but apparently that is the way the modern economy works).

At a recent show-opening seminar, staticians from CEA (Consumer Electronics Association), the show's sponsor, tried to paint a happy face, but with only limited success. Steve Koenig, CEA director of industry analysis, and Shawn DuBravac, CEA economist (pictured), proposed that CE sales will be slow, with a few bright spots. In their State of the Industry report, they said that discretionary spending has turned negative, but technology is still outperforming other durable goods such as automobiles and major appliances (small comfort, because those sales have fallen off the cliff). In addition, proposed government stimuli (such as a $1,000 tax credit for less than wealthy Americans) may help lift sales later in the year.

They listed a number of growth categories: OLED displays (up 149%); HD flash camcorders (up 106%); next-generation DVD players (up 62%); 120-Hz LCD TVs (up 57%); MP3 players with wireless connectivity (up 41%); and home-theater-in-a-box/Blu-ray combo systems (up 30%).

That sounds rosy, but in true glass-half-empty spirit, let me point out that those categories are tiny to begin with, and even a few sales here and there would net huge percentage gains. In addition, even with huge sales in these categories, they would not come close to offsetting any decline in TV sales.

Still, there is hope. For example, even though fewer people can afford really big screens, maybe they will still buy smaller screens. And if they have already have a big screen in the living room, maybe they will still get a new small screen for the guest room. In either case, they might not be buying big audio component systems, but might still spring for a display with a built-in Blu-ray player, or a soundbar.  So, if expectations are low enough, sales for 09 might be decent. That, my friends, is about as optimistic as I can be. --Ken C. Pohlmann

Photo Credit: Dealerscope