Consumer Technology Spending Reaches Record $129B

March 4, 2008

This article is included in these additional categories:

CPG & FMCG | Media & Entertainment | Retail & E-Commerce | Technology | Videogames

Consumer technology sales – IT, imaging, audio, video and consumables – hit a record $129 billion in 2007, up 6.5% from 2006, said The NPD Group. Separately, NPD said videogame sales, including?portable and console hardware, software and accessories,?totaled nearly $18 billion, increasing 43% from 2006’s of $12.5 billion.

However, unlike videogame sales, consumer technology sales growth for the second half of the year, usually powered by the holiday season (Nov 18. – Dec. 29) was just 5%; overall US retail sales revenue fell almost 2%, to $9.6 billion.*

“Such a disappointing holiday season, compounded by a lackluster back-to-school season, as well as economic concerns, took a toll on consumer technology revenue growth in the second half of 2007,” said Stephen Baker, vice-president of industry analysis, The NPD Group.

“It’s concerning to see sales growth slowing, but not unexpected as industry trends point towards a consumer technology market offering its customers more evolutionary, rather than revolutionary, technological improvements in the coming year.”

Other findings of the consumer-tech study:

  • Almost half (47%) of all consumer technology spending in 2007 was concentrated on five categories:
    • notebook computers
    • LCD TVs
    • Desktop computers
    • Digital point-and-shoot cameras
    • MP3 players

npd-consumer-technology-top-revenue-generating-categories-2007.jpg

  • In contrast, consumer spending on these items was 42% in 2006 and 36% in 2005.

LCD TVs

In 2007, LCD TV sales…

  • Increased 74% in dollar sales over 2006
  • Went up 83% in units
  • Accounted for 60% of total TV sales (Overall TV unit volume declined 9%.)
  • Generated $1.7 billion in revenue Nov. 18 – Dec. 29, 2007 – a 50% increase over 2006, leading all categories during the holiday season

npd-consumer-technology-top-revenue-generating-categories-holiday-2007.jpg

Mobile

  • 1.7 million mobile units were sold during the 2007 holiday season.
  • Revenue increased 170% to $388 million.

Videogames and PC Games

According to the findings of NPD’s videogame study:

  • Total console, portable and PC game sales totaled $18.8 billion in 2007 -?the third consecutive year of record-breaking sales for this category.
  • All videogame categories underwent double-digit growth.
    • Console hardware sales – $5.12 billion, up 73% from 2006.
    • Portable game software (up 18%, to $911 million) and?portable game hardware (up 19%)
    • Videogame accessories (up 52%) .

“NPD’s consumer data uncovered some interesting trends to follow during the current console transition,” said Anita Frazier, industry analyst, The NPD Group. “For example, the 35 years of age and older demographic realized the greatest percentage growth, driven by software and accessories acquisitions, while the greatest increase in hardware sales came from the ‘core’ 18-34 year old demographic.”

*According to NPD’s weekly point-of-sale data, derived from a subset panel of retailers that also contribute to NPD’s projected monthly POS panel.

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