Consumer Electronics Industry Expects Increased Revenue in ’08

Revenue from consumer electronics in 2008 is expected to increase 6.1 percent, a rate of growth that’s slightly lower than 2007 but greater than other industry sectors such as housing and new vehicles. The projection is part of the U.S. Consumer Electronics Sales and Forecasts report for January 2008 released Monday by the Consumer Electronics Association (CEA).

Consumer electronics revenue, based on shipments, is forecast to exceed $171 billion this year, up 6.1 percent over the previous year. In 2007, the sector saw revenue of $161 billion, an 8.2 percent increase over 2006.

In contrast, Internet ad spending is expected to increase by 14.4 percent for the year, according to TNS Media Intelligence, while the increase in overall ad spending is expected to be 4.2 percent.

Growth in the gaming category is expected to come primarily from software, which is forecast to climb 26 percent to reach $11.5 billion in revenue. That follows last year’s growth rate of 50 percent. Two of the three next generation gaming systems are connected, and have robust communities, an area shown to provide additional revenue streams.

TV displays are expected to be the largest revenue generator in consumer electronics. The category is expected to comprise 16 percent of all dollars from consumer electronics shipments. The category will likely reach more than $29 billion in revenue, a 13 percent growth over 2007. The CEA estimates more than 50 percent of U.S. households have digital televisions. About 53 percent of U.S. households have broadband.

Next generation DVD players including Blu-Ray and HD DVD have seen slow adoption since their introduction in 2006. In 2008 the two competing formats combined are expected to see a 173 percent growth in unit shipments to 2.8 million. The report did not detail expected revenue dollars on next generation DVD players.

The U.S. Consumer Electronic Sales Forecast is published twice per year and includes sales data, forecast, consumer research, and historical trends for the consumer electronics industry.

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