The sky is falling, but electronics sales are soaring

With the markets tanking, banks imploding, and the massive bailout seemingly having no effect, it's safe to say that the economy is in dire, dire shape. People are cutting back on everything from vacations to vaccinations, yet are apparently still quite willing to open their wallets for new electronic goodies -- if you believe the group that represents all those goody makers, at least. The Consumer Electronics Association is saying that sales of gadgets and the like are surging compared to this time last year, with flat-panel TV sales alone up 40-percent. The explanation is that people are staying home more often to save funds, so are investing in home entertainment systems, videogames, laptops, and other miscellaneous toys to stave off cabin fever, particularly when they can find good deals online. Maybe that explains HD-DVD's continued success?

[Jeremy @ Oct 8th 2008 10:29AM]

There's a more obvious answer. This is a momentary bump in sales from all the "executives" and "advisors" that lost their jobs last week. They are using their golden parachutes to buy junk because they know it's going to be a long winter on the couch in their sweatpants, looking through the want-ads. Also Christmas is coming and if you just got fired, you need to buy presents now with whatever severance you were able to get.

[From My Cube @ Oct 8th 2008 10:52AM]

i also believe it is related to people vacationing less...People saved up to go travel but due to the economy arent willing to spend all that money...so lets say they have 5k put away for a trip to the beach...then decide not to but instead drop 2500 on a new tv and keep the other 2500 in the bank....

[Davey J @ Oct 8th 2008 11:14AM]

i concur. i think it affects the lower-on-the-totem-pole workers as well. like during the great depression, all that boozing. people gotta stay happy during hard times.

[bioadam @ Oct 8th 2008 1:40PM]

My Cube is totally right. It's like the movie "Total Recall": a virtual vacation is much cheaper than the real thing. Twoooo weeeeks!

[Lars @ Oct 8th 2008 2:25PM]

If you're surprised about this trend then you obviously haven't learned anything from history. It does repeat itself.
This is a recurring trend in times of financial stress. People need more escapism when they're worried about making ends meet, having trouble living the way they're accustomed to, etc. For example, during the great depression many people were starving and homeless, yet the movie industry skyrocketed in sales.

[thedesolate1 @ Oct 9th 2008 8:57AM]

My theory is that 1 of 2 things are happening. Either A. people realize that the shit is gonna hit the fan soon and they have to buy those high end electronics before they start becoming nearly impossible to afford and B. Stores are trying to liquidate their stock before they run out of business and thus the slashing prices of consumer electronics all across the board. Either way Im gonna stock up on gadgets and weapons to prepare for our Zombie apocalyps by next year.

[Tina Turner @ Oct 8th 2008 10:30AM]

You hush yo' mouth!

[Canoo @ Oct 8th 2008 11:11AM]

ENgadget just got N bombed

[Robert @ Oct 8th 2008 10:31AM]

Greetings:

The reason why Electronic gadgets are doing well is because the prices are the lowest
in many years.
A good example of this is Netbooks, they took September sales by storm.

I think this Christmas season we will see the lowest prices on Electronic gadgets in
many years.
Regards Robert

[Kamokazi @ Oct 8th 2008 10:42AM]

This is the most insightful comment spam I have ever seen. But it's still worthless spam.

But you still didn't present anything every reader here already knows. Prices on electronics are lower than they were before? Wow, I never realized technology got cheaper as it got older!

Now please take a nice long walk off a very short pier. Preferrably one that has sharks underneath. With frickin' laser beams attached to their heads.

[Shinigami @ Oct 8th 2008 2:49PM]

Wow. The correct comment was low ranked... stuff happens...

[Mr. Ford @ Oct 8th 2008 10:35AM]

The digital tv transition in February is driving alot of those sales. Oh yeah, and retailers posting record low GMP on TV's in order to drive revenue and appear solvent to the shareholders.

Let's ask Circuit City if its working. Their share price just dropped to a record low 48 cents. I guess the answer is no!

[RehabMan @ Oct 8th 2008 10:36AM]

Thanks for the SPAM, Robert!

[Knives_Out @ Oct 8th 2008 10:42AM]

... must .. keep ... buying ...

[tbone @ Oct 8th 2008 10:57AM]

in my psychology class, i think we would explain that we're just trying to boost our self-esteem instead of focusing on the accuracy of the situation. in other words, it's better to have a fantasy than a nightmare

[FreeRange @ Oct 8th 2008 11:01AM]

Could it also be that retailers have had inventory on these sets for a very long time now and are hurting to lose the outdated models so they can bring in new product for the holiday season? Buyers (for the stores) are measured on their inventory levels. If you buy too much and it just sits on the shelves or in the warehouse, you look bad. So they make sacrifices to move inventory so they don't get caught off guard and have too much of the stuff people don't want and not enough of the stuff they do want.

Beyond that, I don't know that I'd trust the CEA for anything but reassurances to the tech industry. In his profile at the link below, Mr. DuBravac (who has very respectable credentials so, please, don't think I'm suggesting he's not qualified because I'm sure he is), the author of the CEA document, is described as being responsible for "provid(ing) research into the technology trends underpinning the industry and quantitative support for CEA’s legislative initiatives." I work in the CE space so I really do hope that he's right but, from where I'm sitting, sales are down from last year.

http://www.nygamesconference.com/speakers08.html

[fischju @ Oct 8th 2008 11:09AM]

Oh god two dires it must be bad

[DaTank @ Oct 8th 2008 11:20AM]

Not that surprised. For what a vacation would cost i have entertainment all year. I did the same thing expecting to cut back on movies and eating out I made my house my palace, so to speak.

I think people are just spending their money where they will use it most and cutting back on everything else.

[Eric @ Oct 8th 2008 11:32AM]

Typically CE and tech does better/manages to hold on during a recession (even during the depression GE and RCA did well). Part of this is because of falling raw material prices (chip fabs are built during good times and crank out product in bad), talented people get a little cheaper and become available, and the stock market being down means big money looks to VC companies for their 20% return.

Good products and ideas will always find a market.

[Zane @ Oct 8th 2008 11:43AM]

My entertainment and fuel budget has gone down a bit, but its just given my temporary cash flow the necessary boost to buy the latest cell phone or home entertainment device. As long as I meet my monthly savings target, why worry?

[Tony @ Oct 8th 2008 11:43AM]

"...and the massive bailout seemingly having no effect..."

The bailout doesn't happen overnight—$800 billion dollars didn't flood the markets on the day it passed. It's going to happen over a period of months or years.

[nowaynoway @ Oct 8th 2008 12:25PM]

If electronics are selling so well why is circuit city stock at 50 CENTS?

[siddharth @ Oct 8th 2008 3:27PM]

because no one really buys from stores anyways...
they have been replaced by online stores, which don't have so many overhead costs and are able to provide lower prices, but also suckier customer service...

[BigD145 @ Oct 8th 2008 12:45PM]

ADDICTION!! Cigarette prices went way up and people still bought them.

[Brazell @ Oct 8th 2008 12:55PM]

it could also be that prices have declined significantly enough that people waiting for a 37"+ TV or some high end electronics can now afford to buy them. That Vizio's are now $800 for a 42" display and other top-brands are only a couple hundred more makes a big difference.

[DanE @ Oct 9th 2008 4:41PM]

I'm not saying everyone is running out right this second to buy the biggest LCD they can find, but like someone else said: when brands like Vizio are releasing 42" TVs with 1080p at the prices they are there will always be a demand! I'm here to prove it and it was definitely worth it.

[Chris @ Oct 8th 2008 1:00PM]

Black Friday should be big for electronics too, especially HDTV according to projections:

http://blackfriday.gottadeal.com

[Captaind @ Oct 8th 2008 1:48PM]

I've done the opposite. I take more vacations and buy less electronics. In 30 years I won't remember or care about what TV, phone, or computer I bought today, but I can always look back and remember the great times I had on different trips. It might be expensive, but they stay with me all my life.

[scoville @ Oct 8th 2008 3:06PM]

This is another example of how Wall Street != US Economy.

They obviously affect each other, but they are not the same.

[richard @ Oct 8th 2008 3:42PM]

dude, prices are low so some sales go up. It's always the season around this time, the blog said compared to last so I don't think cause the season it's up. My thought on the reason why it's up cause we have to switch to digital tv soon. That's it douches, lates.

[Veronica @ Oct 9th 2008 9:09AM]

The economy sucks.... But here is a way to get some extra savings online.
Earthy Dollar website has a lot of great affiliates and ways to save more.

Check it out.

[Dennis Winkowski @ Oct 8th 2008 9:26PM]

Thanks Veronica....

I checked out the site and it seems pretty interesting... I am looking through it now.

Also, I work for Tiger Direct, (corporate sales) but if any needs anything... Let me know and I will see what I can do.

Dennis
Tiger Direct
[e-mail]