If you believe that having the latest thing, the upgrade, the newest widget in consumer electronics is of no consequence to the public, think again. The Consumer Electronics Association reports in its 13th Annual CE Holiday Purchase Patterns study that consumers in the US will spend $21 billion in the holiday season of 2006, an increase of 21% over 2005. With a US population just passing 300 million this week that represents $70 for every human.
This indicates a consumer belief in the economy -- I guess they believe what they are told, again and again -- and is a happy outcome for the consumer electronics industry and, by extension, all the semiconductor vendors involved in supplying parts. But that is a little stretch, maybe: this week is the first that I have ever included a PRC URL in a news item for, of all things, an RF part. That product ingenuity should be of considerable concern for Western designers and manufacturers.
It has to be assumed, on a first approximation, that the IP is not unique to the vendor and, indeed, we have seen an extremely similar part recently from a fabless North American vendor.
But at least that vendor might not benefit from this holiday season as much as other sectors. The top wish list items coincided with the top gift list items, with MP3 players topping the list for adults. Those were followed by DVD players and recorders, digital cameras, laptops, PCs, televisions (not HDTV), video game systems, mobile phones, camcorders and, at the very last -- and significant for future development -- HDTV receivers.
The list was very similar for what people would want to buy for themselves, although a few significant items were added: additional memory for the digital camera that they already had -- user frustration coming home to roost -- plus two real oddballs, clock radios and cordless phones.
Among teens, the list also started with MP3 players, followed by game systems and computers.
The average household spending money on the holidays is forecast by the CEA to be $1625, 14% higher than 2005, which compared to the 21% just for consumer electronics means that there is going to be less spent on food and decorations and more on battery-driven products.
Living in a household with a near-teenager, who has a lot of school peers who seem to be rather more spoiled than the norm, we are in a position to assure the world that portable CD players are no longer "cool." The fact that they are a more sensible and long-term medium for music storage is completely immaterial, as is the CEA forecast's emphasis on generic MP3 players -- whose prices today (and profits) far exceed the introduction prices of portable CD players 10 years ago. It is, once again, down to branding. It is all iPod, iPod, iPod, all the iTime.
Despite the extraordinary peer pressure, we have still not caved in to our tweenager's pleas. It's too easy to do so. Maybe when Zune gets competitive and prices fall? Steve Jobs says that you won't get laid with Zune -- that community building takes too long, and by the time you've "shared" a song via Zune the girl has already "got up and left."
Again, as parents of a near teen, that seems another point strongly in Zune's favor! But until then we're steeling ourselves for the daily "iPod" chorus we expect to continue hearing right through the consumer electronics holiday haul of 2006.
