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Are You Spending Your Share?

April 24, 2008 | Author: Ibex Marketing

A new report from the Consumer Electronics Association (CEA) estimates that the average U.S. household spent $1,405 on consumer electronics in the past year. The CEA is the cheerleader for the consumer electronics industry, so take this result with a grain of salt. But with the average life span of a cell phone now down to 1.5 years, plus the enormous growth in the use of MP3 players, digital cameras and GPS units, it seems plausible that we might possibly be spending this much.

The CEA also estimates that 50% of U.S. households already have digital televisions (TVs with digital tuners), and that by the end of 2008, more than 50% will have HDTVs. Chris Ely, their senior market research analyst is quoted as citing the end of analog broadcasts and lower prices as the driving forces that has led to “many consumers deciding to upgrade their televisions“.

With the end of analog broadcasts only affecting fewer than one in four U.S. households, the weakened economy, and tighter credit, it seems to me that we’re reaching a fairly high penetration rate for HDTVs, and demand could well drop off significantly over the next six months. (Summer is traditionally a slow time for TV sales.) We’re probably in a significant over-supply situation already, so the question is this: just how low are manufacturers and retailers willing to cut their prices further, even while they are faced with increasing energy and labor costs? This summer could well prove to be the time to get a great bargain on a new HDTV.