NPD Group Blog » November Is The Happiest Month

November Is The Happiest Month

Thursday, December 17th, 2009
By Stephen Baker, Vice President, Industry Analysis

NPD released November sales results today showing the best monthly performance year- to-date in 2009. Total revenue tracked through our Retail Tracking Service was flat with November 2008 and represented the first non-negative month of the year. That is the top-line story, but, the intricacies about how this happened (finally!!) are interesting as well.

The two main story lines of 2009, notebooks and flat-panel TVs, remained on the same arc in November. Notebook unit volumes were through the roof and despite the crashing ASPs, were able to generate positive revenue again in November. Flat-panels, with prices falling just as fast, couldn’t deliver the unit increases notebooks did and saw revenue drop with a thud. Interestingly though, these two categories nearly offset each other. Together they accounted for about 40 percent of the dollars in November, representing a little less than 3 percent dollar growth from last year. The underlying message of that statement is that essentially the rest of the marketplace was flat, and that is the most interesting aspect of this month’s data, considering how focused the industry has been on the performance of the two biggest segments. That is because the renewal of a bit of growth outside notebooks and TVs represents a change in the trends we have seen in 2009 (and in prior years as well) and, if it holds, could be the clearest sign yet that consumers are resuming broad-based purchasing of CE in volumes large enough to return the market to a more healthy growth path.

For most of 2009 (except for April/May 2009, which had very tough comparisons to the Bush tax refund in 2008) notebook and TV revenue growth has been around 400 basis points better than the overall market place. In October, and now in November, we have seen that difference dip below 300 basis points. In October, the overall markets 2.7 percent decline was measured against a.4 percent decline in notebooks and TVs, a difference of 230 basis points. The November difference in growth was a bit higher, around280 points, likely the result of holiday promotions but still far below the trend line.

Where November differed was the appearance of new categories starting to show positive trends. Wireless networking equipment showed its strongest positive revenue growth month of the year, digital SLR cameras were positive for the third month in a row after months of declining revenue, and multi-function printers, as well as single-function laser printers, showed positive revenue trends. Both home theater systems and stereo receivers were flat or positive in November as were camcorders, mice, and desktop PCs. If the two largest categories continue to contribute very little to the overall growth of the market it will be up to product categories like these, and results like the ones we have seen in November, to keep the consumer technology market healthy. The sales balance has been somewhat unhealthy over the past 18 months or so as notebooks and TVs increasingly dominated the marketplace. Some restoration of this balance, as we saw dramatically in November, but have been building towards over the last couple of months, is essential if 2010 is to see a renewal of industry growth.

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