NEW YORK (CNN/Money) -
Free-falling prices for plasma TVs, portable DVD players and notebook computers could heat up sales of consumer electronics, making the category a hot-seller for two upcoming crucial sales periods -- back-to-school and holiday buying, according to the latest report from market research firm NPD Group.
In May, prices for 42-inch enhanced definition plasma TVs dropped $86 from April to an average of $2,736.10; prices for 32-inch Direct View TVs dropped $52 to average about $920.25; and prices for portable DVD players fell more than $30 to $234.96, according to the NPD Consumer Electronics Price Watch report.
The other large dollar decliners were 15-inch notebook computers. Prices for the PCs fell $65 to an average of $1,117.74 in May from the previous month.
Overall, the report said retail prices for its Price Watch market basket of most-frequently purchased consumer electronics fell 3.1 percent, the sharpest sequential decline since last November.
According to NPD, the total value of the basket of 27 of the best-selling product categories, including televisions, PCs, cameras and media players, now stands at $12,362, down more than $1,000 since the start of 2004, and almost $2,600 since May of last year.
"Plasma prices continue to free-fall as good availability and wide acceptance of the products spur retailers and manufacturers to maximize their sales opportunities," said Stephen Baker, director of industry research for NPD.
"Prices are especially aggressive on the entry-level models where form factor and design weigh more heavily on the buyer's decision than brand and feature might for a more premium buyer," he said.
The National Retail Federation (NRF), the industry's largest trade group, forecasts average back-to-school spending on electronics to jump 15 percent this year to $101.03, compared to $86.03 a year ago.
The group expects sales of electronics, clothes and footwear to boost back-to-school spending by 7.2 percent to nearly $15 billion this year versus 2003.
The NPD report did note an upside in prices for some products. Prices for standard DVD players rose 11 percent, or $6.06 to $52.55 on average in May, while portable CD players also got a little more expensive, up $3 to $34.37.