CEA Sees Slow Year for Home Audio

The Consumer Electronics Association (CEA) believes 2002 will be a slow year for home-audio sales, but not an unsuccessful one for either manufacturers or retailers.

The CEA expects almost $4 billion in factory sales of home-audio products for 2002. Good news? Yes and no. The bulk of the gains will be in home-theater-in-a-box systems, which the CEA sees as the big winner for the coming year. The popularity of HTiB, as the category is abbreviated, has basically tracked the growth of the DVD, the most successful consumer electronics format ever launched. The CEA is predicting an increase of 23.5% in dollar sales, to a total of $945 million, with the average sale around $350. Approximately 2.7 million HTiB units are expected to be sold, an increase of 20%.

The category enjoyed a 131% increase in dollar sales in 2001, for a total of $765 million. Unit sales rose 94% over the previous year, for a total of 2.25 million. The average price of an HTiB purchase in 2001 was $340, a 19% increase from 2000.

The CEA's crystal ball indicates a continuing decline in sales of audio components, a category that includes almost all the products and brands advertised and discussed in Stereophile. The predicted drop: 2.5%, for a total of $1.39 billion. The component market went down by an estimated 7.8% during 2001.

Sales of rack and shelf systems aren't expected to do as badly as they did in 2001, when they suffered a huge 24.8% drop-off, but they aren't expected to do as well as component sales. The CEA predicts a 3.1% decline for the category, for a total of $1.36 billion in 2002.

Portable audio isn't expected to make any gains in 2002, either. Despite the spike in interest in portable audio brought on by the MP3 craze, the category has suffered a slow decline for the past four years, due to the corresponding diminishing popularity of the boom box (a product niche expected to decline by 19% this year). That trend will continue in 2002, with the CEA predicting a 1% drop from last year's figures, for a total of $2.03 billion. Headset portable sales, however, will go up for the third consecutive year. The organization predicts a 4.4% rise, for a total of $1.51 billion. Headset sales rose by a phenomenal 28% in 2000, the same year that MP3 gained prominence.

Overall, the CEA expects a slight decline in total audio sales for 2002, by only 1.1%, for a predicted total of $6.02 billion in factory-level sales. The audio industry suffered a sales decline of 5.8% in 2001, according to CEA estimates.

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