CES Execs Optimistic Despite Low Consumer Confidence
By Patricia Resende / Mobile Tech Today. Updated January 07, 2009.
Netbooks, high-quality digital cameras and smartphones are just a few examples of what today's consumers want and are still paying for, despite the nation being caught in a recession.
With consumer confidence decreasing slightly in December and companies laying off employees in droves, it would only be fitting for the 2009 International Consumer Electronics Show to be feeling the pain of a failing economy.
Officials of the Las Vegas show, however, said consumer technology spending will do OK despite the decrease in confidence. More than 130,000 people are expected to walk the show floor looking at what the more than 2,700 exhibitors have to offer.
This optimism comes just one week after the Consumer Electronics Association released its most recent CEA-CNET Index of Consumer Technology Expectations, which measures consumers' confidence in consumer electronics and technology. The index found that confidence in December decreased seven percent, to 78.3. An even greater decrease was from year to year, when the index decreased 13 percent.
Not All Products Created Equally
Consumers are increasingly viewing consumer electronics as a necessity, rather than a luxury, according to Steve Kidera at the Consumer Electronics Association. "They need to be connected to the Internet for work or play, need a cell phone or smartphone to stay connected, and want digital content in their living rooms," he said.
Kidera cited a number of product categories that will fare well in the year ahead, despite the economic downturn.
"Consumers continue to go digital, not just for the transition to television next month, but in other products as well," he said. E-readers (think Amazon Kindle) are expected to jump 110 percent in revenue in 2009 as consumers purchase books online and save space when they travel.
Netbooks will also see strong growth, resulting in a predicted 80 percent growth in revenue, according to Kidera. "These ultra-portable computers are environmentally friendly and allow consumers the ability to simplify their Internet experience," he said.
While the purchases of plasma televisions may slow, analysts are expecting consumers not to hold back on purchasing other electronics products, including smartphones.
U.S. smartphone sales were expected to increase 75.7 percent in 2008 and 3.1 percent in 2009, compared to the basic phone's negative 9.8 percent and 11.6 percent for the same periods, according to research company IDC.
Worldwide, smartphone sales were expected to grow 26.9 percent in 2008 and 8.9 percent in 2009, versus basic phones' 4.6 percent for 2008 and negative 3.5 percent for 2009.
Nearly 40 million smartphones were shipped globally in the third quarter of last year, according to market-research firm Canalys, which is 28 percent more phones shipped than in the same July-through-September period of 2007. Smartphones now make up some 13 percent of the overall handset market, according to Canalys.
Palm is expected to take advantage of the need for smartphones with plans to announce its Nova operating system, but the company has steep competition from other smartphone operating-system vendors, including Apple, Symbian, Research in Motion, and Microsoft.
Other products that will do well are portable navigation devices, expected to grow 52 percent. MP3 players that offer wireless connectivity are expected to grow 41 percent, and HD flash camcorders are also expected to see growth, jumping 106 percent in 2009.
New Products on CES Show Floor
The Consumer Electronics Show is hoping its exhibitors' innovative new products will spark consumer confidence.
For example, ZeeVee, a first-time exhibitor, is showing off its new ZvBox, which turns a computer into a high-definition channel by connecting all HDTVs in the home. The ZvBox uses ZvCast technology to allow viewers to access and transmit online content to all HDTVs in the house by connecting to the monitor output of a computer.
Another newbie to the show is Motevo Mobile Media, which is launching an in-dashboard device that comes with a USB port and DVD/CD support, as well as a Bluetooth cell phone hands-free interface. The device comes with a touchscreen and remote control.