Consumer electronics, PC sales drop this holiday season

Consumer electronics, PC sales drop this holiday season

Consumer electronics, PC sales drop this holiday season

Analysts say that after splurge on PCs and consumer electronics during the Covid pandemic lockdown, people may not be hungry to buy more devices this holiday season. High inflation and macroeconomic concerns may also deter customers from making purchases this holiday season.


“The big question is, will people be in the shopping mood?” said Ben Arnold, analyst at retail tracker NPD Group. “The comparison to last year is going to be tough. That’s because 2020 and 2021 were very strong sales years for consumer electronics.”

The NPD Group predicts that spending on tech products during the US holiday season will drop by 6% compared to last year. However, sales will still be 11% higher than pre-pandemic levels for holiday season 2019, Arnold told Investors Business Daily.

At-home and shelter-in-place trends fueled sales by the pandemic of PC gear, tablets, video games and home entertainment products and services. Now, most people have what they need in those categories, Arnold said.

Holiday sales forecast: ‘see below’

Morgan Stanley analyst Eric Woodring echoed the negative sentiment on holiday sales in a recent report entitled “Consumer Electronics Holiday Spending…see below.”

“Consumer sentiment remains largely negative, but was more mixed in our latest survey,” Woodring said in his note. “However, the (survey) results point to a much tougher holiday season for consumer hardware.”

Morgan Stanley’s latest survey results support their underweight, or sell, ratings on stocks. Cricut ,CRCT, Himachal Pradesh ,HPQ) And LOGITECH ,windows), he says.

“What’s most striking about this latest survey is that nearly three times more respondents expect to spend less on consumer electronics and PCs this holiday season versus last year, with more than 70% waiting for discounts.” are,” Woodring said.

Record discount forecast on consumer electronics

The good news for consumers is that retailers can bargain on major gift categories such as TVs and notebook computers to help shoppers get into stores and clear inventory.

Adobe Analytics predicts that online discounts for computers, consumer electronics and toys will hit record highs this holiday season. It estimates that discounts for computers will be as high as 32%, versus 10% in 2021.

It sees consumer electronics discounts of up to 27% compared to 8% last year. Televisions will be discounted up to 19% this season, while up to 11% will be offered in 2021, Adobe said.

A survey by the Consumer Technology Association revealed that streaming video services and video game products are among the top tech gifts people are planning to give this season. Other sought-after gifts include portable audio products, smartphones, and health and wellness technology.

Apple plays in top growth categories

Apple ,AAPL) is a potential beneficiary as it plays into most growth categories. Its holiday products lineup includes new iPhones, iPads, Apple Watch smartwatches and AirPods wireless earbuds.

However, some in-demand equipment will be in short supply this year due to production issues. These include Apple’s iPhone 14 Pro smartphone and . Are included Sony ,Sony) PlayStation 5 video game console.

Logitech chief executive Bracken Darrell said his company expects to have a good holiday season due to its presence in some of the hottest categories. These include video game gear, and tools for content creators livestreaming videos and podcasts.

“We’re going into a holiday period where I don’t think we have a better set of products to buy,” Darrell told IBD.

Consumer Electronics: Digital Gifting on the Rise

Meanwhile, digital gifts are growing in popularity. This includes a plethora of subscription streaming video services such as Netflix ,NFLX, Walt Disney‘s (district) Disney+ and Hulu, Warner Bros. Discovery‘s (WBD) HBO Max, Paramount Global‘s (For) Paramount+, Apple’s Apple TV+ and more.

A recent survey by Recurly pointed to a big holiday season for digital subscriptions, especially among Millennials and Gen Z consumers. Some 63% of respondents are considering giving membership as a gift while 70% are interested in receiving membership as a gift.

The top three subscription categories offered as consumer electronics gifts are: video streaming at 54%, gaming at 39% and audio streaming at 36%, Riccarly said. The majority of consumers, or 61%, said they are interested in offering at least a six-month subscription.

Another digital gift is video game software. The shift from packaged media to digital downloads hasn’t affected the gift of game software, Take-Two Interactive Software ,TTWO) chief executive Strauss Zelnick told IBD.

“People can still give a gift, even if it’s digital,” he said. “You can basically give a code. About 75% of our business on the console side is digital and obviously 100% on mobile.”

He added that Take-Two is well positioned for the holiday season with titles such as “NBA 2K23,” “PGA Tour 2K23” and “Marvel’s Midnight Suns.”

follow patrick setz on twitter @IBD_PSeitz For more stories on consumer technology, software and semiconductor stocks.

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