• by Steve Smith , Staff Writer @popeyesm, January 10, 2012

As the tens of thousands converge on the Consumer Electronics Show (better them than me), it is well to remember how much the mobile phone has changed the terrain for the market in gadgetry. Despite all of the hype and hoopla over consumer electronics this past holiday, the NPD Group reports that for the five weeks ending Nov. 24 2011, sales in the category declined 5.9% from the same period in 2010, which itself was down 6.2%. Interestingly, it was not the big-ticket items this year that were suffering. Both PCs and TVs actually performed better than the category overall. NPD is excluding cell phones, tablets, e-readers and game consoles in this calculation.

“It was a real mixed bag this year,” said Stephen Baker, VP of Industry Analysis, NPD.  “2011 was the first year in quie a while where the real drags on the core CE marketplace were not TVs and PCs.” He noted that the newer devices were actually the big gainers while some of the legacy mainstays of CE were declining rapidly.

The numbers tell the tale. Camcorders were down 42.5% from the year prior. MP3 players were down 20.5%, and point-and-shoot cameras were down 20.8%. GPS devices dropped 32.6%. Blu-ray players, multi-function printers and mice/keyboards were off as well.

But the consistent losses in consumer interest seemed to revolve around the gadgets that smartphones are challenging. Smartphone memory is now sizable or affordable enough to fit most people’s music collection onboard. The current crop of phones have cameras that record HD video and take stills that are very close to the resolution and clarity of most small digital cameras. And the free maps and low-priced directions apps on iOS and Android are functionally equivalent to most in-car GPS add-ons.

Back in the days when Sony and Microsoft were trying to introduce their PS2 and original Xbox game consoles as all-in-one home theater units, I recall the words of a clever agency executive. His argument was that American’s preferred single-function electronics devices, despite companies’ attempts to add functionality to their core technology as a special value-add that attracted a broader audience. He told me that only one multi-function consumer gadget had ever really succeeded: the clock radio.

Perhaps that was so a decade ago, but that was then and this is now. The mobile phone appears to be advancing its technology on so many fronts so rapidly that it marginalizes much of a generation of other devices.