Consumers trade up for less on latest electronics as prices come down

MONTREAL — Prices for the latest gadgets and TVs haven't fallen dramatically, but enough to allow consumers to trade up at lower prices, says the research firm NDP Group Canada. "It's just an excellent opportunity right now to get a high-quality product at a really good price," said Mark Haar, the research firm's director of consumer electronics. For example, a 12-megapixel camera costs $330 down 59 per cent from $806 last year, while a 10-megapixel version, now costs $193 instead of last year's price of $311, Haar said. "The cheaper cameras, they're not selling the way they used to. The consumer is trading up in effect." But Haar said it's only "certain pockets" where prices are dropping. "Prices are falling in Canada, but maybe not to the extent we may have thought," he said. "They may be falling more in the U.S. It's really going to be dependent on the category." He noted prices for GPS devices have fallen this year, but added they fell more last year. The average price of laptop computers and small netbook computers also have come down, he said. "That's really a function of consumers moving toward that netbook, but if you take the netbooks out of the equation the declines aren't that dramatic." Netbooks can be found for $200 but usually average about $300. Prices for TVs have come down about 15 per cent on average in Canada versus as much as 30 per cent in the U.S., Haar said. "I think things have slowed down a little bit on the TV front," he said of price chopping, noting there were deeper discounts a couple of years ago. The weak economy hasn't helped with overall consumer spending, down about 10 per cent this year, Haar said. Sony, Microsoft and Nintendo have all made price cuts to help boost the sales of their video game consoles. Canada's consumer electronics industry is worth an estimated $12 billion a year. Retailers are also price chopping in anticipation of the holiday shopping season. Both Wal-Mart (NYSE:WMT) and Sears Canada (TSX:SCC) have unveiled lower prices, particularly on bigger ticket items like LCD televisions and Blu-Ray players. PC Magazine's Wendy Sheehan Donnell said prices for consumer electronics in the United States seem to be lower this year than ever before. "It's probably a direct product of the economy," said Sheehan Donnell, managing editor, consumer electronics. "Vendors are trying to make up on volume what they're losing on sales." Prices for high-definition TVS are "absolutely insane right now," she said, citing a price of $599 for a lower-end HD TV. Consumers don't have to pay top dollar for the latest technology, Sheehan Donnell said. "Technology is getting so powerful that you can go two or three generations back and still get a very solid product." Technology analyst Carmi Levy said the consumer electronics market has continuously falling prices as new technologies are introduced, but can only go so low. "But at some point you run out of price points and demographic levels to sell to," said Levy of Toronto's AR Communications Inc.