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Consumer Electronics Growth to Continue Through 2007 According to New CEA Forecast; 2005 Growth at 11 Percent (29/8/2006)

The Consumer Electronics Association (CEA(R)) forecasts total CE factory-to-dealer sales to reach $140 billion in 2006, an eight percent growth over 2005, as shown in figures released today by CEA in its semi-annual U.S. Consumer Electronics Sales and Forecasts Report. According to CEA Market Research, final year-end totals reached $128 billion in 2005, making 11 percent growth over 2004.

"The mid-year numbers show continued robust growth in the CE industry, category to category," said CEA President and CEO Gary Shapiro. "Consumers are embracing new technologies in this digital age, as they make new or upgrade purchases for the home, the car, the office or anywhere."

Display technologies continue to be the front runner in the CE industry with revenues reaching $19 billion in 2005 and expected to exceed $22 billion in 2006.

"Replacement and upgrade purchases continue to drive the display market while prices continue to fall," said CEA Director of Industry Analysis Sean Wargo. "As consumers prepare for the transition to digital television, we will see more of the shipment volumes move to digital displays as analog sets' days are increasingly numbered."

CEA projects the DVD market is poised for resurgence over the coming years as two newer technologies, DVD recorders and high-definition DVD, become widely available. CEA figures show DVD recorder prices have declined significantly, with the average price less than $100, with shipments expected to exceed seven million units this year. High resolution DVD players in both Blu-ray and HD-DVD formats entered in the market place this year. Initial product delays have forced reduced volumes, but shipments of home component models should reach more than one million units in 2007.

"MP3 players remain the shining star in the audio market, forecasted to ship 33 million units in 2006 and reach five billion dollars in sales. Additionally, one of the biggest benefactors from the MP3 'craze' is the accessories market. Headphones, docks, speakers and carrying cases, are expected to grow 30 percent this year," said Wargo.

The video gaming category will truly begin to reap the benefits of the new generation of consoles in late 2006, with the maturation of the Xbox 360 and the release of Sony's Playstation 3 and Nintendo's Wii. CEA forecasts total gaming shipments, including both hardware and software, will reach $12.5 billion this year. Growth will continue through 2007 with total sales expected to exceed 2006 figures by 16 percent.

"The fourth quarter of this year is when things really heat up in the gaming market, with continued growth expected through 2007, reaching $15 billion," said Wargo.

Fueled by rising shipments of portable navigation products, 2006 revenues in the mobile video and navigation category are expected to top $2.3 billion - 21 percent higher than CEA previously forecasted in the January edition of the Sales and Forecasts Report. Navigation products were responsible for over half of that total growth.

New to the Forecast Report is an economic overview, in which CEA economists state that the technology sector continues to look extremely healthy. Consumer spending remains strong and inflation remains even, they note, counterbalancing consumer budget reallocation due to higher fuel costs and a deteriorating employment market.

"U.S. Consumer Electronics Sales and Forecasts 2002-2007" (July 2006) is published twice per year, in January and July. It was designed and formulated by CEA Market Research, the most comprehensive source of sales data, forecasts, consumer research and historical trends for the consumer electronics industry. Please source any information cited to the Consumer Electronics Association (CEA(R)).

www.CE.org