SAN MATEO, Calif. – A fierce battle is brewing for consumer-electronics dollars this holiday season as two new video game consoles join the widening pool of TVs, cameras, portable music players, computers and cell phones.
But some market watchers say the electronics industry could be running up against a season that’s more ho-hum than ho-ho.
Analysts believe revenues are slowing for several reasons: prices for a variety of products, most notably flat-panel TVs, have dropped significantly; hits of previous years, such as digital cameras, are maturing; supplies of the new game systems are limited; and no other new blockbuster products seem to have emerged.
While mainstays such as TVs, laptops and Apple Computer Inc.’s iPods still will fuel sales, there appears to be little on the horizon to trigger a repeat of the revenue growth of recent years. A sobering forecast looms for 2007, as well.
“I call it the storm before the storm,” Chris Crotty, a senior consumer electronics analyst at market researcher iSuppli Corp., said of the holiday quarter. “There is more competition. There are more products out there, and it’s only going to get worse.”
All of that could translate to better bargains for consumers but less money for gadget makers.
The gotta-have-it early adopters of technology helped propel the revenue boom of the past few years. But now, analysts say, electronics companies are facing a second and more challenging wave of consumers who may want the new gizmos but are willing to wait for prices to come down.
Take William Tsui, a 42-year-old UPS Store general manager who lives in Redwood City. He already owns two digital cameras, two laptops, two desktops, a new cell phone he got last year, and a built-in car navigation system. He would love to have a big flat-panel TV to replace his rear-projection model, but the price tag is still too high.
“There just isn’t a new must-have product like last year,” when then-new models of the video-capable iPod and super-slim iPod Nano were in demand, Crotty said.
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