What Will Be Hot This Holiday?

Sept. 26, 2006 — -- It may seem a bit early to start thinking about the holiday shopping season, but retailers and manufacturers already have visions of sugar plums dancing in their heads -- not to mention cash!

Analyst groups are beginning to release predictions for what they think will be hot and what they think will not at the stores this year.

Cheaper HD TVs and notebook computers, high-tech cell phones, mp3 and other portable media players, high-definition DVD players and two new video game systems from Nintendo and Sony are all poised to empty bank accounts from coast to coast.

"We're at the cusp of a time period where electronics are more important to people," says Stephen Baker, director of industry analysis for the NPD Group. "And they're willing to spend more on them because they're an important part of their lives."

Baker and NPD believe consumers will plunk down big bucks on electronics during the upcoming shopping blitz and expect to see a six to eight percent increase in holiday spending over last year's $8.2 billion.

It probably comes as no surprise that one of the hottest products driving consumer sales this holiday will be high-definition TVs, according to NPD.

During last year's holiday shopping season, LCD TVs alone generated over $441 million, while plasma TVs brought in over $303 million. And this year, they're expected to be even bigger sellers.

"It's hard to imagine anything happening to ruin that party," Baker says. "I think the most striking thing -- despite continued price reduction in that space -- is what people are willing to pay for their TVs."

Though prices for HDTVs have continued to drop, consumers are still spending large amounts for their sets.

Sean Wargo, director of industry analysis for the Consumer Electronics Association, says one reason is that people want to be on the cutting edge.

"Displays have seen huge growth this year and will grow throughout the holidays," says Wargo. "Consumers are buying them up -- where they would have spent $200-$300 for a new TV previously, now they're spending more to get a widescreen."