PORT WASHINGTON, NY, September 4, 2007 – Growth of notebook PC retail sales, generally one of the biggest drivers for back-to-school, has started to slow down, according to leading consumer and retail information provider The NPD Group's weekly point-of-sale data*. The sales trend isn't confined to just notebooks, most consumer technology** categories are also experiencing slower growth rates.
Notebook sales for the first five weeks of the 2007 back-to-school season (July 15 through August 18) were up 24 percent in units and 11 percent in dollars, while the average selling price (ASP) was down 10 percent. During the same time period in 2006, notebook sales were experiencing a 48 percent increase in units and a 15 percent increase in dollars with the ASP down 22 percent. Desktop sales, similar to trends seen all year, were down 23 percent in units and 16 percent in dollars in 2007. ASP was up 8 percent.
"Notebook sales have exhibited strong growth the past few years, but you can only keep that 50 percent plus growth going for so long," said Stephen Baker, vice president, industry analysis, The NPD Group. "We've hit a ceiling across most categories; economic issues, market saturation, and changes in consumers' shopping habits have impacted sales. Price is also a factor. ASPs aren't coming down as fast as in prior years, and even though consumers still have the ability to get a great deal, they are less inclined to buy a new notebook PC to replace last year's model because the deals aren't as enticing."
Promotions Play a Part
Marketing moves among retailers have put a cramp in back-to-school notebook sales. Notebook PC promotions were up only 12 percent for the first five weeks of the 2007 season compared to the 37 percent increase seen in 2006, according to Fusion data. Promotional activity for both notebooks and desktops only increased 5 percent this year compared to the 30 percent increase seen for total PCs in 2006.
Consumers may have also encountered fewer notebooks and desktops on the shelves as they started their back-to-school shopping. During the first five weeks of the 2007 back-to-school season, notebook shelf space increased 7 percent over 2006, but that's down significantly from 2006 where shelf space had increased 44 percent over 2005. Total PC shelf space increased only 2 percent this year compared to 32 percent in 2006.
"If the products aren't being marketed and aren't in consumers' line of sight on the shelves that's definitely going to have an impact on sales," said Sam Bhavnani, research director, Current Analysis West. "Even though last year was the big push for notebooks, the shift in overall PC promotions and shelf space this year compared to last year shows that there are massive swings in marketing PCs at retail. What retailers and manufacturers now need to consider is how the current situation will affect the fourth quarter and the holiday season."
| Category | 2006 Unit % Change | 2007 Unit % Change | 2006 Dollar % Change | 2007 Dollar % Change | 2006 ASP % Change | 2007 ASP % Change |
| Notebook Accessories | 38% | 11% | 30% | 9% | -5% | -2% |
| External Hard Drives | 78% | 16% | 175% | -28% | 54% | -38% |
| USB Flash Drives | 76% | 36% | 28% | -8 | -28% | -32% |
| Notebook Mice | 42% | 16% | 30% | 14% | -8% | -2% |
| MP3 Players | 16% | 5% | 4% | -8% | -10% | -13% |
| MP3 Player Accessories | 50% | -4% | 46% | -9% | -3% | -5% |
| Calculators | <1% | -2% | 3% | -13% | 3% | -11% |
| 30 inch and under TVs | -8% | -42% | -7% | -31 | 1% | 18% |
| Portable DVD Players | 17% | -5% | -11% | -10% | -23% | -6% |
About The NPD Group, Inc.
The NPD Group is the leading provider of reliable and comprehensive consumer and retail information for a wide range of industries. Today, more than 1,600 manufacturers, retailers, and service companies rely on NPD to help them drive critical business decisions at the global, national, and local market levels. NPD helps our clients to identify new business opportunities and guide product development, marketing, sales, merchandising, and other functions. Information is available for the following industry sectors: automotive, beauty, commercial technology, consumer technology, entertainment, fashion, food and beverage, foodservice, home, office supplies, software, sports, toys, and wireless. For more information, visit www.npd.com.
About Current Analysis West
Current Analysis West, an NPD Group company, offers businesses in the consumer electronics, imaging, and computer sectors a unique combination of causal data, tools, and analysis in weekly, market level reporting formats that provide clients with news of competitive developments and recommendations for rapid competitive responses. Information available through Current Analysis West includes competitive pricing, promotions, and share of shelf. Their analysts offer insight, interpretation, and recommendations that enable clients to address a wide range of business issues. Clients receive all of this information in a timely manner through the Current Analysis West online delivery platform. For more information, visit http://www.currentanalysiswest.com.