U.S. consumer electronics sales to hit record in 2007

LAS VEGAS (Reuters) - U.S. consumer electronics sales are expected to hit a record $155 billion in 2007, fueled by consumers’ fascination with video games, digital music, and flat-screen displays, an industry group said on Saturday.

Exhibitors look over Samsung televisions in the Las Vegas Convention Center during set up for 2007 International CES (Consumer Electronics Show) in Las Vegas, Nevada January 6, 2007. This year's show runs from January 8-11 and is expected to draw over 150,000 attendees. REUTERS/Steve Marcus

Wholesale sales of consumer electronics -- including everything from iPods and audio cables to mobile phones and personal computers -- will grow about 8 percent, up from $145 billion in 2006, when sales climbed 13 percent, the Consumer Electronics Association said in its annual report on the eve of the 2007 Consumer Electronics Show.

Big-screen televisions will continue be the star in the market, CEA said, as consumers take advantage of falling prices to upgrade to plasma and LCD TVs. CEA said display technologies will account for $26 billion in revenues for 2007, when some 19 million of those two types of flat panel TVs will ship.

“The TV market is setting all-time revenue records,” said Todd Thibodeaux, a vice president at CEA. “(Traditional) CRT-based sets are giving way to flat panel displays. The successful ongoing transition to digital television is driving demand.”

Consumer electronics makers have benefited from the rapid change to digital media, a technological step that made it simpler to move audio and video to myriad devices. A rise to $150 billion would represent a 50 percent increase from 2003, when the flat panel market was still in its infancy and overall growth was limited by a decline in stand-alone audio products.

Those stand-alone devices, such as CD players and cassette tape decks, were nudged aside in the advent of digital music players, such as Apple Computer Inc.'s AAPL.O top-selling iPod and competing models by Sandisk Corp. SNDK.O, Microsoft Corp. MSFT.O and others.

Pocket-sized digital music players, many of which also can display snapshots, movies or TV shows, will remain in high demand in 2007, CEA said, noting that 41 million MP3 players are expected to ship in 2007, up from 34 million in 2006.

“It continues to ship at large volumes and 2007 will be no different as the market shifts into a replacement mode,” said Thibodeaux. “Many consumers will be replacing their first-generation players with new players offering video playback capability.”

Next generation video game consoles, digital cameras, personal computers, portable navigation and global positioning system (GPS) devices, are among the other products expected to sell well in 2007, CEA said.

The Consumer Electronics Association’s estimates cover factory-to-dealer shipments, or wholesale figures. While the 2007 growth outlook represents a slowdown from last year, CEA noted that its original projection for 2006 was 8 percent.

“Consumers started the year investing in innovative consumer electronics products and seemingly never stopped,” said Thibodeaux of CEA. “With the 2007 forecast, we see the consumer love affair with technology continuing at a healthy clip.”