Who is going to suffer in Consumer Electronics?
ChangeWave’s latest consumer survey shows a sudden huge pullback in electronics purchasing by U.S. consumers – the largest one since they began measuring spending trends back in 2002.
Only 19% of survey respondents say they'll spend more on electronics over the next 90 days compared to 33% who will spend less – an unprecedented sign of weakness in this space.
So, who and what is going to get hit the hardest? Well, according to their report, LCD TVs, digital cameras, cell phones and iPods (in that order) are going to be the tech toys that get hit the hardest. So, who will be hit the hardest and what companies should I stay away from? Well, Best Buy (BBY) and Circuit City (CC) will most likely get hit hardest. Amazon (AMZN), Apple (AAPL) and eBay (EBAY) should also see sales suffer.
But, not everything is so grim. Their report did show that the Nintendo (NTDOY.PK) Wii remains wildly popular among consumers, with 8% saying they plan to buy one in the next 12 months, and there was a surge in demand for High-Def DVD players, where 9% of respondents say they are planning to buy a Blu-ray player in the next 90 days.
They also looked into the effect of the Tax Rebate and how that might change spending habits. Of the respondents expecting to receive a special tax rebate this spring, only 7% say they’re likely to spend it on consumer electronics.
By comparison, a strong majority say they’re likely to use the special rebate to either pay down debt (33%), invest the money (23%), or save the money (21%).
Get ready for a bumpy ride in the consumer electronics sector.
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