Trends & Analysis: Australian Tech Spending Up 7

Despite three months of consecutive interest rate hikes and a small subsequent in consumer sentiment, Australians remained positive with their spending on technical consumer goods in the fourth quarter of 2009, up 4.0% versus Q4, 2008.

This brings Australia?s total spend in the consumer technology marketplace to $19.4 billion in 2009, 7.1% higher than 2008.

Encouraging figures on the continued fall in unemployment, down to a seasonally adjusted 5.5% in December, coupled with positive news on the global financial situation helped to ease fears and keep the till bells ringing throughout the festive season.

Considerable promotional activity and unseasonably warm weather were both major contributors to the growth at the end of 2009. On average, the industry managed to rise to the challenge and surpass last year's sales results even though last Christmas had the advantage of benefiting from the first wave of government stimulus packages.

Digital imaging downturn

The news was not as positive for digital imaging products, which experienced a 17% value decline compared to Q4, 2008.

Most of the deficit came from the digital photo frame sector which suffered an annual drop of 34% in spend as average prices were eroded significantly, due to increased volumes of cheaper tertiarybranded products.

Compact digital cameras, which constituted 78% of all digital cameras sold in Q4, were also hit hard with a drop of 14% in value.

LCD and plasma promotions drive consumer electronics revenue

While most consumer electronics categories suffered with a downturn of over 10% in sales, the panel TV and set-top box sectors performed exceptionally in Q4, 2009. These sectors expanded by 17% and 76% respectively compared to the same quarter in 2008.

Growth of LCD and plasma TVs accelerated from Q3, 2009, with a 14% increase in value. This was driven predominantly by an intensifying of promotional activity, with all major manufacturers offering high-value, HD-based give-away deals, particularly in October and November.

More than 75,000 Blu-ray home theatre systems, DVD recorders, games consoles and bonus TVs were given away during Q4, 2009.

An additional factor was the increasingly price aggressive bottom-end of the market that was particularly effective in the few weeks leading up to Christmas.

Much of this activity was focused on the small and mid-size LCD screens, which helped the total LCD sector increase its overall share of the panel TV market value to 72%, significantly out-performing the plasma sector.

The affordability of high-end LED-backlit LCD models helped the new technology gain share - the sector accounted for 11% of panel TV revenue in Q4 and is set to increase substantially in 2010.

Mobile telecoms value falls

A lacklustre December for the seasonally dominant pre-paid mobile handset market vanquished any hope for a happy ending to 2009 for the smart/mobile phone market.

The value of the traditional mobile handset market has been in decline throughout the year, but has been buoyed to a large extent by the smartphone sector which accounted for 51% of handset sales by value at the end of the year.

However, this wasn't enough to keep the marketplace from seeing a decline of 8% compared to the same quarter in 2008.

Notebook price cuts boost IT market

Sustained high sales of notebook PCs propelled the consumer IT sector to a value 20% higher than Q4 2008. This rise consolidated its healthy performance in the previous three quarters resulting in a full calendar year increase in revenue of 24% over 2008.

Competitive retail promotions resulted in the overall notebook average sales price dropping to under $1000 dollars for the first time in Australia. The lower prices partnered with ever improving technical specifications caused a substantial increase in sales volume.

A mixed outlook

With new technologies becoming more affordable, and promising unemployment figures, there are certainly signs that consumers will continue to grow in confidence and continue their increased levels of spending in the first quarter of 2010.

However, the global economy is still fragile, and another expected rise in interest rates could lead some consumers to defer large purchases to later in the year.

Furthermore, a lack of government cash stimulus packages in the first six months of the year will impede retailers? efforts to create the same growth rates that were seen at the start of 2009.