Forecast: U.S. gadget sales to rise 8 percent

Demand for digital TVs and MP3 players expected to push U.S. consumer electronics sales to a record $135.4 billion in 2006.

Driven by demand for digital televisions and MP3 players, U.S. consumer electronics sales are expected to grow to a record $135.4 billion in 2006, an industry group said Tuesday.

Wholesale sales of consumer electronics will grow about 8 percent this year, slightly slower than last year's 11 percent rise, according to the Consumer Electronics Association's annual industry forecast, released just ahead of the start of the annual Consumer Electronics Show, the world's largest consumer technology tradeshow.

"The consumer electronics industry is hot," said Gary Shapiro, CEA's chief executive, in a statement. "Consumer electronics sales are consistently growing."

According to the U.S. Consumer Electronics Sales and Forecasts report, 2005 year-end totals exceeded CEA's initial projection of $122 billion. CEA attributes much of the growth in 2005 to new product lines and innovations to wireless devices, flat panel displays, digital music devices and gaming consoles and software.

Digital television sales are seen in 2006 rising beyond $23 billion and 18 million units. DTV sales in 2005 grew 60 percent to $17 billion, fueled by the growing popularity and competitive price declines of flat panel displays such as LCD and plasma.

New gaming consoles, gaming software, wireless handsets and MP3 players with video playback capability, like Apple Computer's iPod, will also spark consumers interest, CEA said. Indeed, MP3 players sales are seen climbing to $4.5 billion in 2006, with 30 percent of all MP3 players sold having video playback capability.

A dozen industries meet in Las Vegas this week for the industry's annual U.S. jamboree to show off the latest electronic gadgets as they angle for a bigger slice the market.

The show, also known as CES, will host more than 2,500 exhibitors, 130,000 industry participants, and more than 28 football fields of display space.

Story Copyright © 2006 Reuters Limited. All rights reserved.

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