For the consumer electronics industry, growth is good even if it's slow growth. And in 1997, computers will lead the way.
The U.S. sales of consumer electronics is expected to reach $69.5 billion in 1997, a six percent increase from $65.7 billion for 1996, according to a report released today by the Consumer Electronics Manufacturers Association.
The six percent growth for the year is down slightly from the upward trend that lasted through the 1980s and early 1990s, said Lisa Fasold, staff director of communications for the association. "This is below our regular growth of about ten percent, but it is still growth," she said.
To some retailers who saw slow sales during the holidays, that will come as good news.
According to recent analyst reports, consumer demand for PCs has slowed sharply in recent months and may not recover quickly. They predict few signs of a recovery without lower prices or a technology breakthrough.
However, the electronics assocation sees a round of new digital products on the horizon that will trigger consumer spending and keep the electronics industry growing.
"The new technologies will accelerate sales in the last two years of the decade," association president Gary Shapiro said in a written statement, "and [they] will add to the consumer electronics industry's exceptional record of growth that is the result of quality products at increasingly affordable prices."
These products include digital cameras, personal communications products, digital satellite systems, and DVD products, which will replace VCRs, CD-ROM drives, and CD players, Fasold said.
"There are a dozen different brands of satellite receivers in 1997, but before there were only SGS Thompson and Sony. When there are more players in the market, products get cheaper. They were only introduced in '94, and there is an incredibly fast growth curve," Fasold said.
While cheaper products are good for the consumers, some retailers are hurt by the lowered prices.
Tandy said it will sell all 17 Incredible Universe stores and also shut 19 of its 108 Computer City outlets in North America. Company officials said stiff competition had taken its toll on the enormous stores that offered the full range of consumer electronic goods.
Circuit City's comparable store sales declined ten percent for its third quarter ending November 30.
Consumers are expected to buy 10 million computers and 22 million television sets this year. PC sales will exceed all consumer electronic products by about $1 billion because they are the most expensive, Fasold said.
"There are 2.7 TVs in every household in the United States, but only 40 percent have a computer. There is just more room for growth in that category," Fasold said.