Electronic Product Prices Decline in August
Oct 18, 2004
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Price declines for U.S. consumer electronics accelerated in August, fueled by discounted price cuts for the popular iPod digital music player and traditional DVD players, according to an industry study prepared for Reuters.

However, the declines were moderated somewhat by an uptick in digital camera prices and traditional televisions, popular back-to-school items that are becoming staples with students. Overall, prices fell 2.1 percent from July for the more popular consumer electronics goods, according to NPD Consumer Electronics Price Watch.

The report, prepared for Reuters, showed the price for a market basket of the 27 most popular electronics goods fell to U.S. $11,979 in August, the first time the basket has fallen below $12,000 since its inception in January 2003.

The decline shows that August is an important selling month and discounted prices are key selling points to drive merchandise sales for the back-to-school season.

Prices for a 20-gigabyte portable digital music player prices fell to 7 percent to $289, a drop of about $75 in the past 2 months and the first time in a year the devices have dipped below $300. Apple's iPod dominates the MP3 player market.

"The iPod effect is very much in evidence as Apple's $100 price decline in its 20 gigabyte player to $299 helped drive prices down," said NPD analyst Stephen Baker.

Mr. Baker added that the overall decline in the category may be sparked by the growing variety of choices available to consumers for hard disk music players, including size ranging from 4- and 5- gigabytes to 30- and 40- gigabytes.

Price declines from August were led by the basic DVD player, which fell 15.7 percent from July to $46.61. High-end consumer electronics also declined with 42-in plasma TVs down 3.7 percent to $2,718, while notebook computers with 15-in screens dipped 4.0 percent to $1,087, NPD said.

Despite the overall drop in prices, some 25 percent of the items in the Price Watch basket saw increases from July to August. Traditional 27-inch TVs edged up by less than 1 percent to about $331, while 3-3.9 megapixel cameras on average sold for $222, the study said. (Reuters)

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