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CES Shows Resolve as 2009 Sales Forecast Dims

8 Jan, 2009 By: Erik Gruenwedel

LAS VEGAS — Despite a projected bounce in consumer spending in the weeks leading up to the digital TV transition Feb. 17, the Consumer Electronics Association (CEA) Jan. 8 said it expects 2009 industry sales to fall 0.6% to $171 billion, the first announced decline in recent memory.

The trade group said the CE industry actually grew 5.4% to $172 billion in 2008 despite the economic downturn, which it said largely affected just the fourth quarter.

The primary revenue driver continues to be digital TV displays, representing 15% of total industry shipment dollars. As the digital transition nears, unit shipments of digital TVs will approach 35 million in 2009, an increase of about 6% over 2008 shipments. LCD displays remain the top choice among consumers, representing 77% of total digital TV units, according to the CEA. 

The CEA said that with increased content, upgraded products and lower prices, Blu-ray Disc revenue (hardware and software) is projected to surpass $1.2 billion in 2009.

The forecast, delivered by Gary Shapiro, president and CEO of the CEA, prior to the opening day keynote of the 2009 International Consumer Electronics Show by Howard Stringer, chairman and CEO of Sony Corp., appeared to mirror gloomy economic projections released Jan. 7 by the federal government.

The Congressional Budget Office said the nation’s economy was expected to shrink 2.2% this year, with unemployment figures topping 9% by 2010, the worst since 1982. With consumers worried about jobs and falling home values, upgrading to a Blu-ray home theater system might be put on hold.

“The CE industry is resilient but not immune from the business cycle,” Shapiro said.

Shapiro said the economic recession underscored the need within the industry to innovate, including creating products that were environmentally friendly and more energy efficient. He said 89% of consumers want their next TV to be energy efficient.

After being introduced by Tom Hanks, who plugged his May movie Angels & Demons from Sony Pictures and lampooned Stringer for driving a Bentley years ago while making documentaries, the CEO said in addition to promoting green products, CE manufacturers needed to focus on enhanced, multifunctional and open-format devices to entice budget conscience consumers.

Stringer cited the development of Blu-ray and connected wireless technology as prime examples of CE ingenuity during tough economic times.

“By 2011, 90% of Sony products will be wireless and interactive with each other,” Stringer said.

He said there were 10 million Blu-ray enabled devices in the United States last year, in addition to 28 million BD movies sold, four times the amount sold at the end of 2007.

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