With U.S. Thanksgiving only ten days away, the CEA (Consumer Electronics Association) held its annual pre-Holiday CES press preview in New York City on Monday and it's pretty obvious what most consumers want this year under the Christmas tree and menorah (not a good idea leaving electronics under hot wax - unless you're into that sort of thing); tablets and smartphones. Not that we needed a press conference to figure that one out.
CEA Chief Economist and Director of Research, Shawn DuBrovac, and CEA Director of Industry Analysis, Steve Koenig were quite blunt in their analysis of the industry and the prospects for the upcoming holiday buying season and 2013. Tablets, smartphones, soundbars, and more tablets are on the wish lists or gift lists for the vast majority of consumers. And those who plan to give the gift of technology this year plan on spending an average of $252 on technology over the next few weeks. Those sales figures represent only a small uptick from 2011 but about a 30% jump in intended spend since 2007. The CEA expects overall holiday sales to jump 3.4%. Online sales are projected to jump 14% due to sales starting earlier and lasting longer ("Black Friday" becomes "Black Friday Week") and the popularity of Cyber Monday.
Speaking of earlier sales, most of the major big box retailers (Wal-Mart, Target, Sears) will be opening earlier on Thanksgving rather than at 12 midnight for Black Friday to draw consumers into their stores. Those rude enough to leave family meals early to stand in line for door crasher specials will discover that certain items are going to be on sale at specific times rather than all-night long; retailers want you to stick around for a while rather than just grabbing that crappy $200 32" LCD you've been craving and being on your way. Also, some retailers are offering guaranteed inventory of select items. If the item on your wish list is sold out when you get there, they'll give you a rain check with the promise that you'll have it in hand in time for the holidays.
The CEA is projecting that more tablets and smartphones will be purchased this holiday season than ever before and that more than 225 million units (combination of smartphones and tablets) will be purchased over the next twelve months in the United States alone.
Amazon and Barnes and Noble are both hoping that consumers will gobble up their inventories of Kindles and Nooks, and Google is pretty certain that tens of millions will be ordering their Android-based Nexus tablets and phones.
The 800-pound gorilla in the room; Apple, is poised to sell a record-breaking number of iPads, iPhone 5s, and notebooks but will once again be a no-show at CES 2013. Not that Apple "needs" to be at CES 2013 with hundreds of exhibitors using Apple products in their booths.
How about everyone else? Glad you asked...
While the numbers look good for certain manufacturers, the reality is certain categories are not going to do well and even experience a drop from 2011.
Video games consoles are going to experience a major decline this holiday season (double-digit) because all of the machines with the exception of the Wii U are approaching their expiration dates and notwithstanding the strong sales for the latest "Halo" and "Black-Ops" releases, gamers are turning to...tablets and smartphones.
With the exception of DSLRs, interest in digital cameras is falling faster than almost any other category as more and more consumers use their smartphones as a camera; something about size and social media interactivity.
Audio manufacturers will be delighted to hear that interest in soundbars and headphones remains very strong; which won't please AVR and loudspeaker manufacturers who have yet to jump on the bandwagon. Soundbars and wireless multi-room audio systems (Sonos, Phorus) are going to be incredibly popular this holiday season and into 2013 as consumers scale back large home theater/home automation purchases and utilize their tablets and smartphones as the hub of their home entertainment systems. Anyone notice a pattern developing here?
Is it too late to buy Apple, Google and Samsung stock?
How about those shiny black things we mount on walls?
Sales of flat-panel HDTVs are expected to fall this holiday season; primarily because many consumers have no compelling need to upgrade and will be focused on tablets and smartphones (yes, we know...). Most of the growth in television sales seems to be in the 60"+ category which will be good news to struggling manufacturers such as Sharp who do well in that particular category, and incentive for more manufacturers to get behind the UltraHD movement because you can't see the improvement of 4K resolution on a set smaller than 60" to begin with.
The prices for the first generation of 4K...I mean UltraHD HDTVs is above $20,000 so nobody is expecting that segment to grow for 2-3 years, especially as OLED is struggling to finally become a product you can buy. Don't look for those 55" OLED sets that Samsung and LG were promising this holiday season because manufacturing has been delayed. Availability of OLED and 4K TVs is expected to be extremely tight until next year.
As much as we love the idea of another format war (sarcasm), we don't necessarily agree that UltraHD is going to be the big "new" thing at CES 2013 as there are no playback devices, zero content, and consumers are unlikely to shell out more than $10,000 for a TV right now.
Front projection systems (projector/screen) make a lot more sense at the moment if you are looking for that "cinematic" experience and while we can't wait to see the new 85"+ Ultra HD models from Samsung, LG, Sharp, and others, the truth is that you can enjoy 110" for under $5,000 right now and screens from companies such as Screen Innovations makes it easier to do so in rooms with ambient light.
3D? Amazingly enough...it wasn't even mentioned at the press event. Not even in passing. The CEA seems to have acknowledged that 3D technology for home use hasn't really managed to capture the consumer's interest. 3D will continue to live on as a feature in mid to high end sets, but it is most decidedly not the next big thing.
How about the Greatest Tech Show on Earth?
CES (Consumer Electronics Show) 2013 is rapidly approaching and with more than 3,000 scheduled exhibitors, it is likely to be the largest CES in history. More than 150,000 attendees are expected, including 35,000 from outside the United States and Canada. The show has become so large that it can't accomodate any more exhibitors until it takes on more space at the Sands in two years.
BPBS is going to be at CES with a full crew (Chris Boylan, Greg Robinson, Ian White, Peter Suciu, Enid Burns - with the intrepid Rachel Cericola keeping us on our toes from afar) so look for our coverage starting on Sunday, January 6th as we stand in the press line for an early preview.
CES 2013 is going to have a larger number of tech zones this year with a greater emphasis on the automobile and health industries. Tech and health is becoming a big topic; especially as ObamaCare starts to do its thing and a convergence between the two is inevitable and likely to impact more consumers than HDTVs or tablets.
Home automation is going to be a huge segment this year and we look forward to seeing what companies such as Control 4, Crestron, and others have to offer the home theater enthusiast.
CES Innovations Awards entries are judged on overall engineering qualities related to technical specifications and materials, aesthetics and design qualities, the product's intended use and function, unique features and how the design and innovation of the product compare to others in the marketplace.
The Sennheiser IE800s have spent some time in my ears and while their $999.99 price tag might freak most people out, they are one of the best headphones I've ever heard and worth trying if you can afford such a luxury audio device.
Gary Shapiro wants to "date" Tim Cook? Say what?
During the Q&A session, a journalist asked CEA President and CEO Gary Shapiro about the lack of significant presence of both Microsoft and Apple at CES. Shapiro said that both Microsoft and Apple are active members of the CEA (Consumer Electronics Association), and Microsoft is even sponsoring some events at CES though they will not have an actual booth this year. Shapiro went on to say, "Look, I'm not saying I don't want to date (Apple CEO) Tim Cook..." which we took to mean that he'd like to see Apple take a more active role in CES, but we won't hold our breath for that to happen.
Also, when asked about the "big thing" for this year's CES, e.g., Smart TV or tablets, or Ultra HD, Shapiro said that there are many trends and hot topics/hot products so it's not really appropriate to say that there is just one central product category or technology or theme taking center stage at the 2013 CES. Rather there are a number of new and exciting technologies and partnerships between content creators and manufacturers that will make CES an exciting show.
If you'd like to make your own contributions to the burgeoning economy and help close out this year as a great one for Consumer Electronics, stay tuned: our Black Friday coverage will be up soon so check back for the best deals this holiday season.
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