U.S. consumer electronics revenue dropped 8% in '09

IDG News Service - The U.S. consumer electronics industry saw sales drop 8% in 2009 as customers went for cheaper products as a result of the poor economy, the industry's trade association said Thursday.

Total industry revenue was $164.9 billion, according to the Consumer Electronics Association. Highlighting the extent to which consumers cut spending was a rise in unit shipments, which were up 10% on 2008, it said.

"There is light at the end of the tunnel and it is the bright light of innovation," said Gary Shapiro, CEA president, during a speech at the Consumer Electronics Show in Las Vegas. "We are seeing more innovation at this show than at any show in our history."

CES is the annual kick-off for the world's consumer electronics industry. This year's show has attracted 2,500 companies and is expected to bring 110,000 people to Las Vegas, although it has been hit by the tough economic conditions. For the first time in five years the show isn't occupying the Sands Expo and is confined to the Las Vegas Convention Center.

For 2010 the CEA expects the industry will see slight sales grow, although consumers are expected to keep a tight hold on purse strings. Sales are forecast to rise by just 0.2% to $165.3 billion.

Falling prices and a preference for lower-cost products will hit the TV industry, where shipments are expected to rise to 37 million while revenue declines slightly to $22 billion. TV makers are hoping 3D and network connectivity will push consumers to buy new sets, and the CEA said 3D set sales are expected to be 4 million this year.

Cell phones are expected to become the primary revenue driver for the industry, with smartphone sales generating about $17 billion on the back of shipments of 52 million units during 2010, said the CEA.

PC sales will be buoyed by the popularity of netbooks, sales of which are predicted to pass 30 million units with revenue of $14 billion, while Blu-ray Disc player shipments will continue to climb, pushing revenue from around $1 billion to $1.4 billion.