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A nice, solid recession can be good for consumer electronics

August 4, 2009 | 12:56 pm

First, the bad news: Sales of consumer electronics are expected to drop nearly 8% in 2009, the industry's first decline since 2001, when the events of 9/11 left most Americans stunned. It's also the biggest decline since 1975, if you exclude 2001.

But wait, there's more bad news for the industry. While some gadgets remain hot in the cold economy -- as Jim Barry of the Consumer Electronics Assn. explains in the video above -- Americans are shunning big-ticket items in favor of bargains, or refusing to buy altogether.

Forget upgrading to a $2,000 computer. Even the digerati are toting slim netbooks and boasting how little they paid for them (often less than $200). Consumers are no longer snapping up those jumbo-sized flat-screen digital TVs like there's no analog tomorrow. Instead, they're going for smaller, more affordable sets. And digital cameras? No need. Already got 'em. In fact, each U.S. home nearly bursts with more than two dozen electronic devices on average, according to the Consumer Electronics Assn., an industry group.

So what's the good news? Barry, who's worked in consumer electronics long enough to remember the bad ol' days of the 1970s, says adversity is the mother of invention.

"In the late '70s, we had the oil crisis, high unemployment and stagflation," he said. "But we also saw the introduction of the VCR, the Apple IIe, the first home game consoles and the beginnings of phone deregulation. It was a period of innovation that really kicked off the digital age."

Any guesses on what revolutionary technologies this recession will give birth to?

-- Alex Pham

Follow my random thoughts on games, gear and technology on Twitter @AlexPham.