Surveys Show Gift-Giving To Be Less Than Electrifying

psp,gameboy,ipodDon't count on that 60-inch flat-screen HDTV under the tree this year. A pair of surveys on consumer technology spending during the upcoming holiday season paint a grim picture for electronics retailers.

Six in 10 U.S. consumers plan to reduce spending in at least one category of communications and media entertainment--ranging from PCs, digital cameras, and music players to cable TV channel subscriptions--according to a new study by management consulting firm Oliver Wyman, a unit of Marsh & McLennan Companies.

The firm predicts an overall decline of 5% to 6% in the consumer technology retail sales in the next year. Oliver Wyman surveyed 500 U.S. adults representing a cross-section of the population.

Desktop and notebook computers, music players and cameras may be the hardest hit, with more than half of consumers surveyed planning to cut back spending on those devices over the next year. That equates to about a 10% drop in sales, according to Oliver Wyman.

Shoppers are also having second thoughts about big-ticket technology purchases. Of the 23% of consumers who were considering buying a flat-panel TV 40 inches or bigger, 33% said because of the economy now they definitely are not going to buy one this holiday season, according to a separate study by market research firm NPD Group.

Similarly, digital SLR cameras were on the shopping lists of about 12% of consumers, but now a quarter of them say they probably won't go ahead with getting a higher-end camera. The findings were based on a survey conducted Oct. 24 to 31 of 800 adults 18 and over from NPD's online consumer panel.

"It looks like there will be a significant drop from last year," said Ross Rubin, director of industry analysis at NPD. "Consumers have told us that they have changed plans to purchase various products this season that have been high revenue-generators for retailers such as flat-panel TVs, computers, cameras and mp3 players."

The outlook isn't completely bleak. Oliver Wyman expects next-generation products such as Blu-ray players, smartphones and HDTVs to see sales gains of 140%, 9% and 3%, respectively. The digital switchover coming early next year and heavily discounted prices should also boost sales of smaller LCD TVs, said Rubin.

The Oliver Wyman study identified subscriptions to services including broadband Internet access, cell phones, and Netflix as the most immune to the economic downturn. Nearly two-thirds of consumers said they would spend as about the same next year as in 2008.

"Delaying the purchase of a computer, digital camera, or music player as a cost-saving measure is easier than canceling or downgrading a subscription for high-speed Internet access or a mobile phone data plan, which consumers may be contractually locked into," said Mark Teitell, a partner in Oliver Wyman's communications, media, and technology practice.

When it comes to entertainment budgets for things such as movies, TV shows, and video games, 36% intend to scale back, which would amount to a 5% sales drop.

On Black Friday, traditionally the biggest shopping day of the year, consumers will be looking for bargains on specific items, according to NPD Group. Shoppers may also go ahead with planned purchases, but buy more affordable brands or less expensive models from the same manufacturer.

ComScore chimed in Tuesday with an online holiday shopping forecast predicting spending will be flat compared to a year ago at $29.2 billion.

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