Doug Bell, an analyst with the research firm IDC, said his company plans to cut its projections of a 10.2 percent rise in personal computer sales in the fourth quarter after conversations with both manufacturers and consumers. “We’re seeing the lowest consumer confidence levels in a long time, and major vendors are cutting shipments,” he said.
Sales of high-end cellphones could also take a hit. This Christmas was supposed to be the season of the smartphone, when all of the major mobile phone makers came out with new devices to challenge Apple’s iPhone. In the past few weeks, new touch-screen competitors have been introduced, including the G1 powered by Google’s Android platform, Nokia’s 5800 Xpress Music and the BlackBerry Storm from Research in Motion .
But with consumers worried more about the financial crisis and its impact on their pocketbooks, the new must-have phone could become a not-have. Smartphones are among the most expensive mobile devices, some costing hundreds of dollars.
“It’s the impulse purchase and the self-purchase that’s going to suffer this holiday,” said Marshal Cohen, chief industry analyst at NPD Group.
And retailers, worried about grabbing the few dollars consumers are willing to part with, will be offering the kind of discounts usually only seen in the days leading up to Christmas. “I think electronics are going to go through an early promotional period,” Mr. Cohen said. “We’ll be lucky to get through October without aggressive promotions.”
Still, for all the gloom, the outlook for electronics is better than for retail sales as a whole, according to analysts.
Jason Oxman, vice president for industry affairs for the Consumer Electronics Association, said the trade group was projecting that sales of televisions and audio equipment would be 4.7 percent higher this holiday than a year ago, while video game hardware sales will be up 3.5 percent.
Meanwhile, many analysts are predicting that overall retail sales will be flat or decline over the holidays, dragged down by categories like apparel and luxury goods. “With consumers already saying they plan to spend less, stores with lean inventories, those inventories on sale as soon as they hit the floor, and tightening credit both for businesses and consumers, where can growth come from?” Mr. Cohen wrote in a report on Tuesday.
Mr. Chukumba said some consumers would respond to the economic downturn by buying electronics instead of going out to dinner or a sporting event. “There’s a nesting phenomenon going on,” he said. But the concern for retailers is that customers will nest with the products they already have.
Damion Isaac, 31, a warehouse manager from South Euclid, Ohio, near Cleveland, said he has a six-year-old 31-inch TV that he is itching to replace. But he cannot afford to buy a new one, so he will not even go window-shopping at Best Buy. “I don’t even torture myself like that,” he said.
Laura M. Holson, Chris Maag and Karen Ann Cullotta contributed reporting.