One silver lining to the economic crisis, if there is one, is that we get bizarre new vocabulary. For example, Jimmy Carter brought us the fun new word, "stagflation." Now, we have another fun new word, "staycation."
That is being used to describe the hopeful theory that the latest downturn will not crush the consumer electronics industry nearly as badly as it's crushed our 401(k) plans.
The theory of Staycation goes something like this: Since people can't afford to go on vacation, they'll stay at home. So far, so good. And, going a bit further out on the limb, since they are staying at home, they will buy home entertainment stuff. You know, things like HDTVs and Blu-ray players, as well as discs and subscriptions to content services. In other words, things to ward off cabin fever.
The idea of staycation is courtesy of an outfit called Futuresource Consulting. They argue that despite economic contractions, rising unemployment, falling home prices, low wage growth, and faltering business confidence, consumer electronics and in-home entertainment will weather the storm and "indeed, expenditure in these segments can even increase."
Wishful thinking or expert prediction? Judge for yourself . . .
According to FutureSource, “Much of it hinges around the ‘staycation’ attitude. Rather than going on vacation or dining out by candlelight, consumers see the purchase of hot new ‘must have’ electronics items like Blu-ray players, flat panel TVs, or smart phones as a far better value-for-money option. The tangible benefits of these products can be enjoyed for a long time to come and are seen by many as essential items once consumers begin the retreat into their living rooms.”
“Futuresource research from the economic slump of 2001 reveals digital cameras and DVD players continued to grow sharply when the economy stagnated, giving us a clear indication that home entertainment can ride the storm. Stretching the time line backwards further, during the economic downturn of the early 1980s, sales of VCRs in the UK rocketed, growing by 440% between 1980 and 1983.”
New figures released by Futuresource show the markets for flat panel HDTVs and Blu-ray disc players will continue to expand in Europe and the USA this year, with the majority of consumers continuing to migrate up to more expensive, better specified products. “The US flat panel market is on track to reach nearly 30 million shipments this year, with LCD screens experiencing a healthy 40% growth on 2007. However, although they’re still seeking that HD fix, many consumers in the US are shopping for smaller screen sizes, between 32” and 42”. Subsequently, we are likely to see slower growth for the US in the giant screen size segment (50-inch-plus). By 2010, overall shipments will have grown to 36 million units.
Okay, that's the argument. Sounds plausible. The only question is, does anyone actually have any disposable income left? —Ken C. Pohlmann
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