Holiday Spending on Electronic Gear to Hit $33.8 Billion

These five products are expected to account for more than 51% of all spending on consumer electronics gear for all of 2014, or about $108.8 billion of $211.3 billion in total sales. The data come from the Consumer Electronics Association (CEA).

The CEA’s chief economist said:

Consumers are decidedly more optimistic about holiday spending on tech this year versus last year. The macroeconomic environment is providing a firmer foundation and holiday consumers are showing a strong inclination to shop this holiday season. CEA’s forecasts point to growth in overall spending as well as spending on tech this holiday season.

The organization expects 63% of U.S. adults to give an electronics gift this holiday season. CEA expects headphones and earbuds to be the most popular, with 27% and 26%, respectively, of shoppers buying these as gifts. Tablets are also expected to attract 26% of shoppers, with notebooks/laptops garnering 25%, TVs getting 24% and smartphones 23%. About 10% of consumers are expected to purchase a fitness device, and 9% will purchase some smart device for the home. Only 8% are looking at a smartwatch as a holiday gift this year.

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Regarding its predictions for last year’s holiday season, CEA expected sales of tablets to increase 21% over 2012, but the actual sales increase was just 12%. The CEA also overestimated the amount of online sales growth, projecting growth of 18.7% against an actual total of 15.7%, and missing mobile sales on the high side as well, forecasting growth of 35.5% compared with actual growth of 20%. At least the CEA has the courtesy to keep score.

More than half of consumers — 54% — will purchase electronic gear online this year, the first time the total has surpassed 50%, according to the CEA. Brick-and-mortar stores won’t be left out. Some 77% of shoppers say they are likely to buy electronic gear at a brick-and-mortar location. This is good news for Best Buy Co. Inc. (NYSE: BBY), which covers both spaces but has been pressured by sharp price competition.

The seeming lack of interest in smartwatches is interesting. What would sales have been if Apple Inc. (NASDAQ: AAPL) had been able to get its Apple Watch out in time for the holiday season? Last year a smartwatch did not even figure into the CEA’s list of gift items and it grew from zero to 8% in one year. This will be a good item to watch in the 2015 holiday shopping season, to see how much difference an Apple can make.

ALSO READ: Apple, Smart Watches and the Internet of Things