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Last Updated: Sunday, 7 January 2007, 02:54 GMT
Technology 'embraced by public'
By Darren Waters
Technology editor, BBC News, Las Vegas

Sales of flat panel TVs are driving the industry
More people than ever are becoming early adopters of technology, says research outlined in Las Vegas.

"Consumers get it; they understand technology and they are adopting it accordingly," analyst Sean Wargo told the Consumer Electronics Show.

More than $155bn (80bn) in consumer technologies is expected to be sold in the US in the next 12 months.

"Driving the industry is the transition to the new breed, the next generation of technologies," Mr Wargo said.

More than 140,000 people are in Las Vegas for one of the world's largest technology shows.

The industry says consumers' love affair with gadgets will continue despite a global economic slowdown and a prediction that growth in the US market would halve in 2007 from last year's figures.

Hardware over time deflates - it's the services and user experience that becomes more important
Sean Wargo

Mr Wargo, director of industry analysis for the Consumer Electronics Association (CEA), said the industry would continue to grow faster than retail on average.

He said people were "not only upgrading what they have but acquiring new technologies every year".

'Adoption curve'

"The adoption curve now is faster than ever. That early adopter segment of the market has grown."

The CEA said the average US household spent $1,500 (765) on consumer technology in 2006 and expects that figure to near $2,000 (1100) this year.

Total gadget sales to hit $155bn
MP3 player market to peak at 41m units
Video game industry to be worth $16bn
In-car navigation sales to hit $1bn
Flat panel TV sales to break $22bn
Source: Consumer Electronics Association

"Consumers are allocating more of their disposable income on consumer electronics and will continue to do so.

"They are adopting technologies faster than ever. New technologies we haven't even seen yet are sure to be adopted faster than their previous generations."

Globally the industry is being driven by the shift to high definition and digital.

"Consumers are buying LCDs (flat panel TVs) instead of CRTs (cathode ray tube TVs). They are buying portable MP3 players rather than portable CD players.


"They are not only upgrading what they have but acquiring new technologies every year."

But one trend that could be about to slow is the shift to digital music players, such as iPods.

CES preparations
The show floor opens on Monday

CEA research predicted that the market for MP3 players in the US would peak in 2007 at 41 million products as people look to replace existing players and as mobile phones with music playback become more successful.

In 2005 the average number of products per household in the US was 25, the CEA said.

Mr Wargo said that content and services were becoming increasingly important to the industry. "Hardware over time deflates - it's the services and user experience that becomes more important.

"Blogs, voice over ip (internet telephony) and social networks are part of the fabric of our industry."

He also predicted that "disruptive distribution" was also becoming more important, referring to the shift to new methods of getting content such as TV programming, video and gaming via the net.

"They go against the mainstream thread of cable, satellite, retail of receiving content.

"We are witnessing a shift away from old models - physical to digital. We are still in early throes of this. Physical media dominates."

However, research carried out by the CEA suggests that almost half of people want to watch their content on a PC on their TVs.

"They want to make a bridge between a TV and a PC sitting perhaps in a home office."

According to the survey 52% of people were interested in being able to download a movie and burn it on to a DVD.

A first-look inside the Consumer Electronics Show

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