Strong holiday sales expected for tech

High prices at the pump are pushing shoppers toward better deals and online retail.

Michael Singer Staff Writer, CNET News.com
Michael Singer
3 min read
Consumers electronics groups expect the holiday season to finish out a strong, if not blockbuster, year for the industry.

"With gasoline prices recently hitting record high levels, and home heating costs predicted to rise as much as 60 percent, families appear to be as price-conscious and practical as ever this year," said Matthew Moog, president and CEO of CoolSavings.

Still, consumer electronics--from high-end televisions to cheap DVD players--are likely to top the lists of many gift givers again this year.

"Electronics are not just a Best Buy, Wal-Mart, Target, (or) Circuit City product anymore," said Steve Baker, an analyst with The NPD Group, which tracks retail sales of electronics. "You are going to have a tough time going anywhere, whether it is a grocery store or a drugstore or a clothing store, and not falling over a 7-inch portable DVD player or a 19-inch television or $29 DVD player."

Portable music devices like Apple Computer's iPod Nano and Microsoft's Xbox 360 are expected to top this year's holiday shopping lists.

Flat-screen TVs topped holiday wish lists last year, and this year will see a repeat of the trend.

According to a survey of 3,780 shoppers by mall developer Macerich Company, 14 percent of all holiday shoppers plan to purchase a plasma TV as a gift this year. But shoppers won't have an easy choice: More than 50 plasma TV brands and 60 LCD-TV brands are on the market.

Global television shipments are expected to increase to 176.1 million units in 2005, up 5.8 percent from 166.4 million in 2004, according to analyst firm iSuppli. Much of that growth will be driven by LCD sets.

Online shopping for consumer electronics and everything from CDs to toys is also expected to continue to thrive. Internet analysts expect online holiday sales in the United States to grow 20 percent to 30 percent this year as consumers are lured by free shipping, convenience and holiday promotions.

Among the published projections for online holiday shopping is the eMarketer Online Holiday Shopping Preview, which predicted in October that online holiday sales for the fourth quarter would be up 21.9 percent over last year to $26.2 billion.

ComScore Networks predicts that consumer spending on non-travel goods at U.S. Internet sites will exceed $19 billion during the November through December holiday season, representing about 24 percent growth over last year.

Atlas, an online marketing analysis division of aQuantive, is forecasting that Dec. 12 will be the peak Internet shopping day this year, despite the usual expected post-Thanksgiving rush.

Many of those shoppers are looking for good deals. An online shopping survey of 1,920 members of the FreeStyleRewards discount site revealed that "taking advantage of free shipping" (69 percent) and "finding special offers" (66 percent) were the primary motivators for increased online holiday shopping this year.

"Saving time" and "higher fuel prices" (57 percent) tied as the third most important reason. A significant majority (75 percent) said they will "do less driving to shop for myself and my family."

The Consumer Electronics Association expects U.S. consumer electronics sales to increase 8.8 percent to $122.9 billion this year. However, unit sales are expected to decline 1.8 percent, according to the industry group. It's a strong year but it lacks the hearty growth of last year, when overall sales climbed 10 percent, according to some analysts.