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The Consumer Electronics Association (CEA) officially lowered its 4Q 2008 expectations, predicting “essentially flat” revenues and growth of only 1% compared with the same period last year. That’s down from the 3.5% CEA originally forecast in October and repeated in November.
The group pointed to newly available data, including final October shipment and revenue data and a new survey of Black Friday shoppers, as providing reasons for its lowered expectations. CEA said the October data showed the economy and consumer sentiment "remain muted" and said its surveys "show overall spending is down this holiday season."
"Although CEA certainly took price declines and weakness in consumer demand into consideration, the severity and the speed of declines in these unprecedented times caught everyone off guard. Consumer sentiment is improving, but shopper unease this holiday season is creating challenges for all sectors of the economy, including consumer electronics," said Jason Oxman, CEA’s industry affairs senior VP. "We are now projecting essentially flat revenue for the fourth quarter, and we continue to project overall growth for 2008."
CEA noted that it now expects mobile phones to see 5% growth in the fourth quarter compared with last year, down from the 11% forecast in October. The group attributed the adjusted expectation to consumers holding off on upgrading handsets and "steeper than expected price declines."
Similarly, "greater than expected discounts on laptops and an increased interest in lower-priced netbooks are impacting the computer category," said CEA. The organization is now projecting category will decline 2%, down from the 1% decline CEA originally predicted.
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