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CEA Reports Consumer Electronics Sales Jump 11 Percent In 2004; 2005 Sales Projected to Grow 11 Percent and Hit $125.7 Billion (19/1/2005)

HDTV, Digital Cameras, MP3, and Flash Media Key to Industry Growth

Manufacturer-to-dealer sales of consumer electronics will reach a record-high of $125.7 billion in 2005, according to the Consumer Electronics Association (CEA). These sales mark an 11 percent increase over the $113.5 billion dollars sold in 2004. The figures are part of CEA's bi-annual U.S. Consumer Electronics Sales and Forecasts report. The report was released yesterday following a presentation by CEA Director of Industry Analysis Sean Wargo, during the International CES, the world's largest annual technology tradeshow, being held January 6-9 in Las Vegas, Nevada.

CEA also announced that the estimated year-end totals for 2004 would exceed initial expectations, reaching $113.5 billion - an increase of 11 percent compared to year-end totals for 2003, the first year sales of consumer electronics products passed the $100 billion mark.

"These numbers reflect that consumer electronics is a hot industry," said CEA President and CEO Gary Shapiro. "Consumer electronics sales continue to surpass our expectations and break existing records year after year, because this is an ever-changing industry that delivers innovative products that enhance consumers' lives. American consumers love consumer electronics products. That passion is reflected in the continued sales growth of our industry."

In the video category, digital television (DTV) continued to be a front-runner in 2004, as total sales of DTV products reached $10.7 billion on 7.3 million units, which is an increase of 78 percent in dollar sales and 63 percent in unit sales over 2003 figures. One of the biggest drivers of digital television is flat-panel, ultra-thin displays (LCD and plasma). Total sales of LCD TVs (analog and digital) topped $2 billion in 2004 and will surpass $3 billion in 2005. Plasma TVs will experience similar growth as unit sales reached 853,000 in 2004 and then grow to over 1.4 million units in 2005.

The growth of the portable MP3 player and aftermarket autosound helped boost audio sales in 2004. The portable MP3 player category has shattered all expectations as unit sales more than doubled in 2004 to over 6.9 million units and dollar sales nearly tripled in revenue to $1.2 billion, compared to figures from 2003. The category will continue to grow in 2005 as CEA forecasts that unit sales will reach 10 million units and $1.7 billion in dollar sales.

CEA Director of Industry Analysis Sean Wargo also pointed to satellite radio as a key driver in 2004 and going forward. "Satellite radio and video navigation are two areas that are helping to drive the aftermarket category. Current 2004 figures show that satellite radio is helping boost autosound revenues up 10 percent for the year. Mobile navigation devices also are helping the aftermarket category as dollar sales topped $782 million in 2004, an increase of 35 percent compared to dollar sales in 2003. Dollar sales for navigation devices will continue to grow in 2005 as CEA estimates that total sales will hit $935 million."

CEA also noted that flash media has become one of the biggest growth categories as digital content continues to grow with more usage of digital cameras and MP3 players. Flash media cards ended 2003 with more than $1 billion in shipment volumes and CEA estimates sales of the cards will end 2004 at over 200 percent growth with more than $3 billion in product shipped. CEA forecasts increased demand for storage to push the market to nearly $6 billion during the next year.

Sales of personal computers (PCs) remained strong in 2004 as more consumers turned to portable PC products such as laptops, notebooks, and tablet computers. Current year shipments of the portable PC products are pushing the category into a new round of growth, with total revenues up 10 percent to a height of $17.2 billion. This trend is expected to carry the market into the new year as total PC shipment revenues surpass $18 billion in 2005, bringing printers and other PC related peripherals and accessories along with them.

Wargo identified wireless telephones as another strong category for the CE industry as more and more innovations are introduced into the market. Phones with built-in digital cameras have helped add to the projected growth of 15 percent in revenues in 2004. Unit sales topped 79.6 million units and will grow to 89.2 million units in 2005. CEA also forecasts that the wireless industry will reach a new high of $11.3 billion in the next year.

Data cited in this release is available for purchase through CEA's Market Activity Reports and Analysis (MARA) program. With more than 500 reports published annually, the MARA program is recognized as the "authoritative source" for data on the consumer electronics industry.

www.ce.org