Holiday tech sales growth slowed

Consumer technology retail sales the week of Christmas achieved a record of nearly $2.5 billion, but overall technology holiday spending grew more slowly than years past, according to The NPD Group Inc., a market research firm.

According to weekly point-of-sale data compiled by NPD, consumer technology retail sales from the week of Thanksgiving through the week ended Dec. 23 grew 6.5 percent from the same time period in 2005 to $8.75 billion, a slowdown from the 10 percent increase seen the previous year.

Last minute shoppers Christmas week accounted for more than 28 percent of all the holiday volume, besting the 27 percent of holiday volume done at the same the previous year, NPD said. However, sales during the final week of the holiday season were up only 11 percent, down from 23 percent in the final week of 2005, the firm said.

"Revenue is still increasing, but at a slower rate," said Stephen Baker, vice president of industry analysis at NPD. "That can be attributed to several factors, including huge price reductions on in-demand items, such as flat-panel TVs, as well as Christmas Eve falling on a Sunday, which eliminated revenue totals from that day into the last shopping week's final numbers."

LCD and plasma TVs, digital cameras, notebook computers and MP3 players were the top holiday sellers, accounting for 42 percent of overall volume, up from the 33 percent the top five categories represented in 2005, NPD said.

Calling 2006 "the year of the LCD TV," the firm said "tremendous" price cuts on big screen flat-panels resulted in dramatic market share gains for the larger size TVs. Sales of 32-inch and above LCD and plasmas accounted for 50 percent of flat-panel sales, up from 35 percent in 2005. Thirty-two inch LCDs outsold every size and type, NPD said.

Additionally, more than 5.1 million MP3 players were sold during the holiday season, making it the best-selling product category with a retail price over $100, NPD said. Digital single-lens reflex cameras led the digital camera market with an 82 percent jump in unit sales spurred by an average price that dropped from $950 in 2005 to $830 in 2006. Notebook computers dominated the retail PC market capturing about two-thirds of PC sales, according to NPD.

Revenue from navigation systems increased 143 percent and unit growth grew 309 percent during the holiday season, making it the fastest growth product category, NPD said. Digital cable sales plugged in $37 million in revenue, a 200 percent increase over the previous year, hard drives experienced a 24 percent jump in revenue, and USB flash revenue increased 28 percent.

"Pricing and availability were two of the main reasons so many categories did well," Baker said. "Consumer technology is not just for the tech geek anymore, it's marketed for everyone from grandparents to their grandchildren."

- Dylan McGrath
EE Times