2003 U.S. Sales of Consumer Electronics to Hit New Record, Kissing $100 Billion, Says CEA; 2002 Sales Exceed Initial Forecast; Digital Products Continue To Drive Growth.

Business Editors/Hi-Tech Writers

LAS VEGAS--(BUSINESS WIRE)--Jan. 7, 2003

Sales of consumer electronics products will total a record $99.5 billion in 2003, marking a 3.5 percent increase over 2002, according to figures released today by the Consumer Electronics Association (CEA).

The figures were issued as part of CEA Market Research's annual U.S. Consumer Electronics Sales & Forecasts report.

The association also announced that 2002 sales are estimated to total $96.2 billion rising a healthy 3.7 percent over 2001. The 2002 figure is slightly higher than CEA's initial projections forecast in January 2002.

"Consumer electronics continue to capture the imagination and meet the needs of the American consumer," said CEA President and CEO Gary Shapiro. "From digital video to gaming, from wireless to in-car electronics, from home networking to digital imaging, our industry's products provide consumers with instant access to information and entertainment and enable them to stay connected - making the world a better place. As an industry, we are raising the world's standard of living and increasing people's knowledge and their ability to communicate. More, we continue to stand as an essential cog in the national economy even in these uncertain times."

Digital products continue as the primary driver behind industry growth. In the video category, stand-alone DVD players maintain their march as the fastest growing technology of all time, now in 35 percent of U.S. homes. Unit sales totaled 17.6 million in 2002, up 39 percent on the back of new combination DVD/VCR players.

Sales will climb an additional 14 percent in 2003, reaching 20.1 million units on dollar sales of $2.6 billion.

Sales of digital TV (DTV) sets and displays exceeded CEA forecasts in 2002, as shipments totaled 2.683 million units. By the end of 2003 consumers will have invested more than $15 billion in DTV products with sales for the year reaching 3.8 million units on dollar sales of $5.5 billion.

Consumer interest in flat panel televisions will result in strong gains in related categories in 2003. Sales of plasma sets will rise by 40 percent in 2003 with dollar sales totaling $616 million, up from $453 million in 2002. Sales of LCD televisions will jump from 965 thousand units in 2002 to 1.1 million units in 2003 on dollar sales of $111 million.

Rapid Adoption of Digital Audio

While the audio category faces declines across several products, the category also is benefiting from rapid consumer adoption of digital products. Despite continuing debates over home recording rights, MP3 players shot past all estimates for a breakaway year in 2002.

Unit volume sales leapt to 1.7 million, a 56 percent increase over 2001, and are expected to rise another 26% to 2.1 million units for 2003.

Fueled by the massive adoption of DVD, Home Theater in a Box also is bringing growth to the audio industry. Unit volumes will increase by a further 10% in 2003, bringing total sales to 3.4 million units, even as lower wholesale prices bring revenues to just over $1 billion.

In digital imaging, digital camera sales will total more than 11 million units in 2003, up 26 percent from 2002, on dollar sales of $2.9 billion.

PC Sales Back on the Upswing 

Two categories once thought to have reached a plateau will see growth in 2003. Growth in PC sales is expected to finally come back into positive territory in 2003 as unit sales rise roughly 4 percent and dollar sales total $11 billion as digital media and increasing PC specs are helping drive a new upgrade cycle.

Sales of wireless telephones will increase by 6 percent to 60 million units on dollar sales of $8.8 billion.

CEA also forecasts that the electronic gaming market will total over $12 billion in 2003 with sales of gaming software increasing by 17 percent to $9.2.

Finally, as Americans continue to be concerned about their security, sales of home security systems are expected to see a seven percent increase in 2003, rising from $1.9 billion to $2.1 billion.

"The future of our industry is bright, even as some individual companies face challenges" said Shapiro. "Twenty years ago our industry sales were $14.1 billion. In 2003, we will be close to $100 billion in sales. The consumer technology market has a solid record of growth, and we have every reason to be optimistic going forward. Despite economic uncertainties, consumers are finding compelling reasons to upgrade from analog to new digital products."

Visit www.eBrain.org to obtain a full copy of the report.

About CEA:

The Consumer Electronics Association (CEA) represents more than 1,000 corporate members involved in the design, development, manufacturing, distribution and integration of audio, video, mobile electronics, wireless and landline communications, information technology, home networking, multimedia and accessory products, as well as related services that are sold through consumer channels.

Combined, CEA's members account for more than $80 billion in annual sales. CEA's resources are available online at www.CE.org, the definitive source for information about the consumer electronics industry.

CEA also sponsors and manages the International CES - Defining Technology's Future. All profits from CES are reinvested into industry services, including technical training and education, industry promotion, engineering standards development, market research and legislative advocacy.

UPCOMING EVENTS

2003 International CES - Defining Technology's Future
January 9-12, 2003, Las Vegas, NV

Electronic House Expo - Spring
February 26-March 1, 2003, Orlando, FL

CEA 2003 Winter Technology & Standards Forum
February 24-February 28, 2003, Scottsdale, AZ

2003 CEA Winter Summit
March 4-6, 2003, St. Regis Aspen, Aspen, CO

HDTV Summit & the Academy of DTV Pioneers 2002 Awards
March 10, 2003, Renaissance Hotel, Washington, DC

CEA 2003 Spring Leadership Retreat
May 5-6, 2003, Grand Hyatt, Washington, D.C.

Connections 2003
May 7-9, 2003, Fairmont Hotel, San Jose, CA

Asian Home Electronics Fair
May 14-17, 2003, Shanghai, China

7th Annual Consumer Electronics CEO Summit
June 18-20, 2003, Vail, CO

CEA 2003 Summer Technology & Standards Forum
August 1-4, 2003, Location TBA

CEA 2003 Fall Conference and Industry Forum
October 12-15, 2003, Carlsbad, CA

CEA 2004 Fall Conference and Industry Forum
October 18-20, 2004, Location TBA