November 6, 2008

Consumers Wary Of Frivolous Gadgets This Holiday Season

When it comes to product demand this holiday season, experts say Bluetooth headsets may be on the lower end of the spectrum among electronic devices.

Shoppers are likely to shun anything closely linked to entertainment in the home or car because such electronics are seen as dispensable in an economic crisis.

That category includes audio speakers, desktop computers and GPS navigation devices.

"GPS may have some demand issues," said Stephen Baker, an analyst for research firm NPD.

"If you are looking at necessity versus discretionary, that is a category that is not very well-penetrated, which is in its favor. But the negative part is people saying: 'Do I really need this'?

A national online survey conducted last month showed that only 5 percent of those who wanted personal electronics desired a Blu-ray disc player.

Digital picture frames, the sleek devices that can scroll dozens of pictures and even update remotely via an Internet link, may feel the pinch if shoppers' budgets force them to decide on one electronic product or another, Baker says.

"A lot of people think of frames as a neat thing to do, but may end up saying: 'I probably really need a new digital camera.'"

Tim Herbert, an analyst for the Consumer Electronics Association, suggests the rapidly changing -- and cost-saving -- nature of consumers' use of certain products is also affecting shopping habits.

"For example, in the category of cordless phones and answering machines, in years past that was always a very hot category, but more and more people are moving toward a cell phone-only model of communication," he said. "Or the answering machine capabilities are built into a service that you get with your carrier or phone service."

"Consumers are going to be more mindful of their budgets," said Herbert. "It's a tough question to say morally whether it is right to spend on the holidays this year when they may be feeling economic strain, but historically, its somewhat in our nature."