Consumer electronics sales grow

But pricey items may fall victim to downturn

The offerings of a home entertainment equipment company draw visitors during a consumer electronics fair in Berlin last month. A trade group predicts holiday sales of home entertainment gear will remain strong. (Michael Sohn/Associated Press/File 2008)

Faced with the economic crisis, American consumers may be eating out less and buying fewer cars. But their passion for digital electronic gadgets isn't fading as quickly, according to the Consumer Electronics Association.

Shawn DuBravac, the trade group's economist, said yesterday that retail sales for consumer electronics were up 1.2 percent in August from the same period last year. By contrast, sales of home furnishings were down 6.8 percent, and auto sales were down 13.5 percent.

"Despite all of the other indications that we're in a recession, consumer electronics spending continues to hold up pretty well," said DuBravac. "In some categories, they're doing phenomenally well." For instance, sales of flat-panel TV sets are up 40 percent so far this year, GPS navigation systems sales are up 95 percent, and sales of video gaming hardware have grown 21 percent.

For the upcoming holiday season, DuBravac predicted sales of home entertainment gear would remain strong, with unit sales of TV and stereo equipment up 4.7 percent from the year before and unit sales of game hardware up 3.5 percent.

DuBravac said the US economy is certainly in a recession, with citizens slashing their purchases of many big-ticket items. But he added, "We're allocating more of what we do spend to consumer electronics."

He also said 16 percent of the average American's purchases of durable goods are of some kind of electronic device, up from 14 percent in 2005.

"It's never been this high," DuBravac said.

But independent analyst Roger Kay of Endpoint Technologies Associates Inc. in Wayland was skeptical about the industry's rosy scenario. "Most of the macroeconomic information that I'm dealing with shows the likelihood of consumer cutbacks in a lot of categories," said Kay. "The higher price points are probably going to be hurt noticeably this holiday."

Kay said less expensive electronic devices, like low-cost laptops and cellphones, will probably do well this year. "I would certainly look for declining average selling prices in every category," he said. "The more expensive it is, the more likely it is to be dead in the water. If it's cheap, it's OK."

But DuBravac said he's seen little evidence of this. For example, sales of laptop computers have remained strong, even though desktop machines generally cost less. "Consumers really want that mobile experience," he said.

Also, DuBravac said consumers will often buy expensive home theater systems as a substitute for travel, dining out, or going to movies.

Hiawatha Bray can be reached at bray@globe.com.