M+E Connections

Large-screen 4K Ultra High-Def (UHD) TVs and artificial intelligence (AI)-driven, voice-controlled speakers were again among the best-selling technology products over the 2017 holiday season. While the TV category was helped by increasingly prevalent high-end features including High Dynamic Range on premium models, the smart speaker/virtual assistant category was helped by a wider range of product offerings.

U.S. tech product sales finished the season about as expected, and will probably come in “around flat to very slightly up in revenue” when the final data are tallied, NPD analyst Stephen Baker told the Media & Entertainment Services Alliance (MESA) Jan. 5.

There were “improving results in most categories” as average selling prices (ASPs) on PCs, TVs and tablets – the established large tech product categories with significant installed bases — “went up enough to offset unit declines that we expected,” he said.

While there seemed to be more 55-inch TVs promoted for the Black Friday and Thanksgiving weekend this time, 4K TVs probably made up a larger percentage of all TVs promoted during that holiday period, Baker pointed out to us in November.

The major TV brands, including Samsung, LG and Sony, all seemed to “kind of pull away from smaller screens and more entry-level price points in their promotions, opting instead to focus on larger-size screens and premium models including OLED (in the case of LG and Sony) and QLED (in the case of Samsung), he said Jan. 5.

During the entire five-week holiday period, unit volume on TVs over $1,000 was “flat” compared to the prior year, but revenue grew 10%, he told us. The ASP of premium TVs (models over $1,000) was up almost $160 and all those models are 4K, he said.

But, “from a growth perspective, I don’t think there’s any question smart home, voice speakers [and] headphones were three of the killer categories this holiday,” he said.

Although the number of smart speakers being fielded by manufacturers has grown, there’s still only two major players in the category – Amazon and Google, he pointed out. “On a unit basis, we saw some pretty big increases” in sales, he said, but added: “Dollars are certainly way down from where they’ve been as those two companies really don’t care about revenue or profitability on those products right now. They’re very much in installed base mode in driving incremental volume, which is why you see products like” the Amazon Dot and Google Home Mini for under $50 each, which saw “pretty substantial sales volume,” he said.

But not even hardware price cuts may have been enough to significantly move the needle for virtual reality (VR) devices during the holiday season. Baker didn’t have final holiday season sales numbers yet for that category, but told MESA: “I am sure they did not do as well as people might have expected them to. I’m 100 percent sure of that… That was not a gangbuster category this holiday.”

The Consumer Technology Association (CTA), on the other hand, was “thrilled with the impressive growth of AR/VR,” Karen Chupka, its SVP-CES and corporate business strategy, said in a Jan. 4 news release offering a bullish forecast for that category in 2017. Combined U.S. sales of AR/VR headsets and eyewear grew 30% in 2017 to 3.9 million units, with revenue crossing the 1 billion mark for the first time (a 17% increase in dollars), it said.

Meanwhile, all the latest video game consoles from Microsoft, Nintendo and Sony were in strong demand during the holiday season. Supplies of the newest version of the 4K Microsoft Xbox One X console were, like most SKUs of the Sony PlayStation 4 and Nintendo Switch hybrid console and portable game system, spotty at many major U.S. retailers during the holiday season. (https://www.mesaonline.org/2017/12/18/new-game-consoles-strong-demand-holiday-season/)

GameStop reported initially strong demand for the Xbox One X shortly after that system’s launch, while also projecting that demand for Switch would outpace supplies through the holiday season.

Yet consumers who wanted to buy just about any of those three consoles were still likely able to find one in time for Christmas or Chanukah if searching at Amazon.com or the stores or websites of major retailers including Best Buy, GameStop, Target and Walmart.

That wasn’t, however, the case with the Super Nintendo Entertainment System (SNES) Classic Edition … unless one was willing to shell out well more than its $79.99 suggested retail price by buying it from an Amazon third-party seller and still not get it in time for Christmas, or cough up an even higher price from an eBay seller and get it in time for Christmas. Consumers quickly nabbed each and every unit stores received of the retro plug-and-play console in a situation that echoed what happened with the widely sold-out Nintendo Classic Edition during the 2017 holiday season.