Strong demand for video game consoles, laptop computers and cellphones will help the consumer electronics industry ring up a 7.4% sales increase in the U.S. this holiday season, an industry trade group forecast Monday.
Americans are expected to buy $48.1 billion worth of electronic gadgetry in the fourth quarter, up from $44.8 billion last year, the Consumer Electronics Assn. said.
Although consumer electronics sales are expected to outpace the overall retail sales growth rate of about 4%, shoppers' economic worries mean the industry will probably grow about half as fast as it did during last year's unusually strong holiday season.
In the fourth quarter last year, consumers snapped up flat-panel televisions and digital cameras in record numbers, fueling an industry sales increase of 16%.
"It's important to remember that this year's increase comes on top of last year's phenomenal growth," said Joseph Bates, the association's research director.
Damping growth is the weak U.S. dollar, which can make goods manufactured overseas more expensive here, said Rob Enderle, principal analyst with consulting firm Enderle Group.
Also tempering growth this year is the slump in the housing market and slower job creation, association economist Shawn DuBravac said. On the other hand, he said, low unemployment levels and a steady increase in average incomes mean consumers will continue to spend this Christmas.
Devices that tap into people's desire to connect, share and communicate are likely to sell particularly well this year, DuBravac said.
These include digital cameras with the ability to wirelessly upload pictures to social networking websites, cellphones that capture and share video, and game consoles that let players chat and find opponents via the Internet.
Topping the list of potential gifts are video game consoles, according to a CEA study. The group surveyed 1,003 adults and 501 teens by phone in September.
Parents said personal computers were No. 1 on their wish lists, trumping world peace, which came in at No. 2.
Among teens, clothes, digital music players and video games were at the top.