Consumer electronics market facing slowdown

Growth in consumer electronics sales has slumped to 6.5 per cent

Growth in consumer electronics spending is starting to slow down as the industry scrambles to find the 'next big thing'.

The Consumer Electronics Association (CEA) said on the eve of its annual Consumer Electronics Show in Las Vegas that sales in North America are expected to reach $155.2bn in 2007. 

While revenues will continue to grow, the 6.5 per cent growth rate is slowing down significantly compared to 13.5 per cent in 2006.

Sean Wargo, a senior industry analyst for the CEA, tried to put a brave smile on the gloomy data.

"A large reason why we are growing is because consumers are buying into the new products, and adopting technology faster than ever," he said.

"Any new product that comes out, one that we can't even see yet, is sure to be adopted much faster than a prior generation. Consumers understand technology and are adopting accordingly."

Spending on consumer technologies is outgrowing the overall economy, Wargo pointed out, indicating that the industry is taking revenues away from other segments of the economy.

Former emerging technologies such as flat-panel televisions and portable media players are starting to mature, resulting in a price drop and deceleration of overall growth.

But Wargo warned that there are no clear signs of any technology that will allow the sector to recapture its past growth.

He touted services such as YouTube as potential candidates, but said that it was too early to call out any winners.

"The Consumer Electronics Show is at a crossroads," Wargo conceded. "The real theme is: What's the next big thing?"