U.S. shoppers are expected to take advantage of lower prices and scoop up the latest MP3 players, LCD (liquid crystal display) and plasma TVs, digital cameras, and notebook computers as retailers enter the holiday season, which officially started the day after Thanksgiving in the U.S. and lasts until early January's sales.
Shoppers are expected to spend US$17.1 billion on consumer electronics this holiday season, according to a study conducted by the Consumer Electronics Association (CEA). Portable MP3 players lead the list of hot-ticket items, with 28 percent of 1,000 people surveyed by CEA interested in acquiring one, an 8 percent increase from the same survey conducted by CEA last year. Plasma TVs came in second on wish lists, followed by digital cameras and notebook PCs.
Apple Computer Inc.'s iPod will dominate the portable MP3 player segment, said Sam Bhavnani, principal analyst at Current Analysis Inc. "The [iPod] Nano is going to lead the charge. It's one of the sleekest models out there." At US$199, iPod Nano's 2G-byte version fits in the price threshold that consumers may set for MP3 players, Bhavnani said.
Creative Technology Ltd.'s Zen MP3 players will be an alternative to the iPod for some buyers, Bhavnani said. Meanwhile, Sony Corp. is missing the U.S. digital audio boat as its new A-series Walkmans are available only in Japan, he said.
IPod Video could be the exception to Bhavnani's sense that portable video players might not attract consumers this holiday shopping season because the technology is in its infancy and so is pricey. "Stuff that's $400 to $500 that shows video still hasn't proven itself," Bhavnani said. But at $299 iPod Video is more affordable and because it is a music player with video capabilities that makes it more appealing, Bhavnani said.
Those interested in images will be attracted again to digital cameras with eye-catching designs, higher resolutions, bigger LCD screens and more affordable prices compared to last year, said Ed Lee, director of research at InfoTrends Research Group Inc.
Basic users may opt for 4 megapixel cameras in the $100 to $200 price range, a $100 fall from last year's holiday season price range, Lee said. Canon Inc. and Hewlett-Packard Co. (HP) are already offering a 5 megapixel digital camera bundled with a photo printer for $249, he said.
Camera phones account for more than half of the cell phones sold worldwide today, but they aren't as powerful and are better suited for situational snapshots, so camera phones won't overshadow digital still camera sales this holiday season, Lee said. As digital camera sales increase, the demand for analog cameras will continue to fall, he said.
Digital SLR (single-lens reflex) cameras in the $800 price range, like Nikon Corp.'s D50 and Canon Inc.'s Rebel models, may attract photographers, though won't sell in volume, Lee said. Wireless cameras with proprietary systems to wirelessly transfer and print pictures could lie low this year as companies work on developing a standard, Lee said.
While shoppers aren't expected to rush to stores for expensive cameras, notebook PCs are dropping in price, with vendors like HP offering laptops for less than $500, and others expected to break the $400 mark, Bhavnani said. Using low-end Advanced Micro Devices Inc.'s Sempron or Intel Corp.'s Celeron processors, such low-priced laptops have limited memory and storage, so won't appeal to all buyers, but there will be a market for them, Bhavnani said.
"During holidays, people are always looking to spend less money," Bhavnani said.
But, typically consumers will look for wide-screen notebooks with 80G bytes of storage, a minimum of 512M bytes of RAM and a DVD-RW optical drive, which will be available for around $1,000 or more, Bhavnani said.
Consumers also have pricey plasma TVs high on their wish list, according to the CEA survey.
Plasma TVs are expensive to give as gifts, so consumers might treat themselves to them, said Steve Kovsky, senior analyst at Current Analysis. "People on the higher end who have money to spend will opt for plasma [TVs]" while the budget-conscious may opt for 20-inch to 32-inch LCD TVs, he said. Users need to know how to differentiate plasma TVs and LCD TVs while shopping. "Nine out of 10 don't know if they are looking at a plasma or LCD," as they look alike, Kovsky said.
Plasma TVs are ready for prime time as most manufacturers have addressed the longevity issues and problems relating to burn-in of images on plasma display panels, Kovsky said. LG Electronics Inc. earlier this year incorporated technology in PDPs that doubled its viewing life from 30,000 to 60,000 hours, according to the company.
Plasma TVs supporting the 720p HDTV (high-definition TV) resolution will be priced between $1,999 to $3,999, compared to 42-inch lower resolution plasma TVs that sold for $2,000 to $3,500 last holiday season, Kovsky said. TVs supporting the 720p HD specification display images at a resolution of 1280 pixels by 720 pixels.
Prices of 20-inch to 32-inch LCD TVs have fallen by as much as $2,000 from last year, reaching a budget-friendly price for those who want a flat-screen TV at home, Kovsky said. LCD TVs will be priced from $389 to $1,499 for 20-inch to 23-inch models and $999 to $3,999 for 30-inch to 32-inch models, with prices dropping up to $799 as the holiday season progresses, Kovsky said.
The release of Microsoft Corp.'s next-generation Xbox 360 gaming console could trigger some interest in high-definition and big-screen TVs, said Kovsky, who has written a book on Xbox. The Xbox 360 will appeal to older teens and young adults with money, but not younger kids as not many titles are available for them, Kovsky said.
The most anticipated Xbox 360 titles are Microsoft's "Perfect Dark Zero," Tecmo Inc.'s "Dead or Alive 4" and Electronics Arts Inc.'s "Madden NFL 06," according to a study by IGN Entertainment Inc.
Consumers also expressed interest in acquiring DVD recorders and home theater speakers or systems, according to the survey. Gifts received by people could include cordless phones, home DVD players, portable headset CDs, game peripherals, DVD recorders or cell phones, according to the survey.
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