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Consumer Electronics Holiday Preview

It's almost Thanksgiving -- the important American holiday marking the traditional beginning of the Christmas shopping season, featuring Black Friday shopping action, with great deals and hordes or rampaging shoppers. This year, retailers are trying to spread out the peak by already starting with hot deals, to try to avoid the stampedes and encourage consumers to keep coming back to the stores.

Then right after the holidays comes the 2010 edition of the annual International Consumer Electronics Show (aka CES), back in Las Vegas from January 7 to 10 (see wrap from last year).

The CES is produced by the Consumer Electronics Association (CEA), now one of the top 15 trade associations in the U.S. with over 2,000 member companies. CES itself is the world's largest consumer technology tradeshow. While CEA expects the show to be slightly smaller than last year, it's still huge -- with some 2,500 exhibitors and 110,000 attendees.

The CEA held its annual CES Preview event in New York last week, and presented its market research projections for the holiday shopping season.

Some highlights for the holiday season:

The CEA expects holiday spending on gifts to rise 4% this year to $764 per household, still down from $882 in 2007. But 29% of that gift spending will be on consumer electronics products, up 8% from last year.

The CEA is then projecting a 6.0% growth rate in unit sales for fourth quarter 2009, compared to -6.3% in last year's collapse. This growth will be driven by computers and audio / video equipment (including portable devices).

The holiday gift wish list for CE products by adults is similar to last year, with notebook PCs, portable media players, flat panel TVs, video game systems, and digital cameras rounding out the top 5. But then there are some new entries on the list, with E-readers, iPhone, and Blu-ray players, good old desktop PCs, and smartphones at number ten.

The CE gifts wanted by teens is similar, with more emphasis on portable devices, with portable media players at the top, mobile phones at number four, portable game devices at seven, and another new category, netbooks, appearing at number nine.

The Top CE Gifts list -- products people actually are planning to buy as gifts -- echoes these trends (so people may actually be getting the gifts they want), with portable media players at number one, notebook PCs and portable game devices in the top five, smartphones now tied with cell phones at seven (combined they would be at the top), followed by portable navigation devices, portable boomboxes, and again netbooks rounding out the top ten.

Several trends are already apparent for holiday shopping, which may help in finding good deals: more focus on CE products at mass merchants (like Wal-Mart) instead of electronics stores, an effort to spread out the "Black Friday" peak with earlier and ongoing deals, and an attempt to raise spending through offering both low-end and higher-functionality produces, as well as through aggressive bundling of related products.

The CEA is looking to Internet TV and then 3-D TV to help drive interest in new products. More TVs and set-top devices, including DVD/Blu-ray players, will be Internet-enabled, enhancing viewing with interactive links and informational widgets. Already 56% of viewers have visited the website associated with a TV program, and 42% are watching online.

As to 3-D TV, the CEA sees a gradual growth much like the prior experience with HDTV, which would be a nice boost for the industry. However, the need to look nerdy by wearing special glasses will be an inhibitor to consumer acceptance.

See my article from last year's show for more details on the event and lots of links: 2009 International CES Summary.

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