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LCD TVs now hottest holiday gadget

Digital cameras led U.S. holiday spending for the last three years, but LCD TVs took first place this year with $925 million in sales.

LCD televisions beat out digital cameras to become the top-selling gadget during the 2006 holiday season, according to NPD Group market data released Friday.

From 2003 to 2005, digital cameras generated the most revenue when it came to U.S. holiday spending on consumer electronics, computers and cameras, NPD analyst Steve Baker said. But this year, the $925 million spent on televisions with liquid-crystal displays topped the $825 million spent on digital cameras.

"Clearly, price was a huge driver this year, and availability," Baker said of the LCD TV surge. In addition, LCD TVs spread to the more lucrative 30-inch-and-larger category, which plasma and rear-projection TVs previously had had largely to themselves, he said. A total of 1.3 million LCD TVs shipped in the holiday season, he said.

During the holiday season--the five weeks between Thanksgiving and Christmas--spending overall increased 6.5 percent to $8.75 billion, Baker said.

The third-place category was notebook computers, with $810 million spent on a total of 1 million systems, followed by digital media players, with $720 million spent on about 5 million units, Baker said.

Digital camera shipments increased 20 percent to 4.5 million compared with the 2005 holiday season, but revenue increased only 2 percent Baker said--meaning that the average selling price dropped 15 percent. "There was price compression in general, and especially in the point-and-shoot segment," he said.