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News > Companies
A brave new info world?
January 8, 1998: 3:07 p.m. ET

As information goods leap off shelves in `98, don't count couch potatoes out
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NEW YORK (CNNfn) - Are the days of the couch potato numbered?
     At first blush, the latest electronic sales outlook for 1998, released Thursday by the Consumer Electronics Manufacturers Association, seems to herald a brave new world of cyber-age consumerism.
     Sales of home information products, the report forecasts, are poised to overtake those of entertainment goods in a consumer electronics market that will experience a 5 percent growth spurt, rising to a record $75.6 billion.
     Modems, printers, cordless phones and monitors will account for $34.5 billion in sales, compared with $20.4 for entertainment products such as televisions and VCRs. Personal computer sales alone are expected to pole-vault to $17.6, up $1.7 billion in 1997.
     "While home entertainment continues to be an important segment of the consumer electronics industry, home information has become the largest and fastest growing product group," Gary Shapiro, CEMA's president, said.
     But total dollar sales figures, CEMA officials note, can be deceptive, leading to a false impression that entertainment products are about to be eclipsed. In fact, they say, Americans' love affair with their televisions is stronger than ever, as a little number-crunching indicates.
     Jim Barry, a CEMA spokesman, says that the substantially higher sales figure for information goods, including computers, is due in large part to the gaping price disparity between these goods and less costly entertainment products.
     "The average computer," Barry said, "is still $1,500 to $2,200. The average TV set is under $400." Given the differential, Barry said, the 25 million televisions Americans bought last year fall short in total dollar sales tallies of the figures for the 8 to 9 million computers purchased over the same period.
     Similarly, Barry said, VCR purchases rose to 16 million in 1997 from 14 ½ million the year before. But their dollar value barely matched the figures for the 4 million video camcorders sold.
     Digital cameras, according to CEMA, will post the highest growth rate in 1998, with sales increasing about 47 percent. The cameras can take pictures that can be loaded directly into computer databases.
     Sales of Digital Versatile Disc (DVD) players, able to store 13 times as much information as a CD-ROM, will dramatically increase, CEMA said, from $170 million last year to $326 million in 1998.
     Manufacturers also are racing to bring to market by year's end the long-overdue high-definition television sets, which will offer pictures twice as detailed as conventional sets plus surround sound. Prices for HDTV are likely to begin at $4,000, putting them well beyond the pocketbooks, for the time being, of most consumers.
     Meanwhile, the CEMA report said, sales of set-top boxes that furnish instant Internet on your television will burst onto the market, generating $180 million in sales.
     "The word is digital," said Barry. "We tend to think everybody knows about this stuff, but they don't. People are going to be more aware of it when digital high-definition TV starts." By 2012, he predicted, 75 percent of homes will have HDTV.
     None of this means Americans will wean themselves anytime soon from an entertainment addiction that keeps them glued to their television sets an average 7 hours a day, said Barak Kassar, senior marketing manager with Wink Communications, an entertainment and information deliverer.
     "I think entertainment still rules the day," Kassar said. "And I think we're seeing more entertainment in information products."
     Kassar made a distinction between "lean-back," or passive products, like television, and "lean-in," or interactive products that require some feedback from the user.
     "There will continue to be a great divergence between the time people spend with their passive products and their active products," Kassar said.
     That means -- you guessed it -- don't count the couch potato out just yet.Back to top

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