Tech Holiday Sales Down 5%

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U.S. consumer technology  holiday sales were down 5 percent in 2010 totaling $10.3 billion, according to a new report from The NPD Group.

Heavy sales promotions early in November, before Black Friday, did not convince shoppers to spend early as sales for the first three weeks of the month fell by 5 percent compared to the previous year. Overall NPD estimates that 2010 sales for the 9 week sales period will total $14.9 billion down 4 percent from last year.

NPD-Group "Record sales in 2009 across major categories such as notebook PCs and TVs, combined with a significant slowdown in the pace of price declines created a difficult headwind for the industry in 2010," said Stephen Baker, vice president of industry analysis at NPD.

"With retailers and manufacturers focused on price maintenance, tech consumers ignored early season promotions, and instead keyed in on the traditionally price-aggressive deals offered during Black Friday and the week before Christmas. As a result, sales for the first three weeks of November and the first three weeks of December were significantly weaker than the traditional bookmark shopping periods."

NPD estimated early this year that tablet cannibalization rates could be as much as 15 percent likely impacting the sales of close to 1 million PCs during the holiday season. Notebook unit volume fell 9 percent with little to no discounting.

Some of the categories that have traditionally lent themselves to gift-giving items experienced a rough holiday season. Point-and-shoot camera sales declined 9 percent in units, MP3 player unit sales dropped 8 percent, GPS fell 24 percent in units, and digital picture frame unit volume fell by 24 percent.

"The industry suffered during the 2010 holiday season as the high-volume categories such as cameras and MP3 players experienced unit volume declines," said Baker.

"Though more niche and converged devices were attractive to consumers looking to replace older products, the volumes to drive industry growth simply weren't there."

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