The $35 billion-a-year consumer electronics industry foresees "a solid 5.3 percent expansion" this year, according to the Electronic Industries Association, but both retailers and manufacturers here at the Consumer Electronics Show fear that the stronger Japanese yen could mean higher prices for consumers.
"You're going to get a blip at this show; the prices are a little higher," said John Witt, director of marketing and sales for Citizen Watch, a Japanese electronics company, which expects price increases ranging from 3 percent to 10 percent.
"It's affecting us, it's going to affect everybody," said Gary Weissberg, director of product development for Sanyo Electric. "It's especially affecting low-end products."
Since last September, the yen has jumped more than 20 percent against the dollar, forcing Japanese manufacturers -- who produce the overwhelming majority of consumer electronics -- to determine whether they will accept lower profit margins or raise their prices. Some companies, notably Toshiba, plan to pass along their costs; others aren't so sure.
"We haven't yet determined what we'll do," said a spokesman for Sony Corp., the consumer electronics giant.
Despite pricing uncertainties, most observers at this show are very optimistic about continued growth in the compact audio disc and several video technologies that have driven retail sales over the last year.
Sales of compact disc players will hit 1.5 million units in 1986, according to the EIA, up from 850,000 in 1985. Some compact disc manufacturers privately call that projection conservative and expect their sales to surpass 2 million units.
Sales growth of video cassette recorders (VCR), which has been the hottest growth category in electronics the past five years, will level off slightly to 12.5 million units this year -- up from 11.85 million last year. That would bring household penetration of VCRs to nearly 40 percent, according to the EIA.
One emerging video category that has attracted considerable attention and support is the new 8 mm video cassette format -- a potential rival to the VHS-VCR format. Sony, Matsushita, General Electric, JVC, Canon and other leading electronics companies are now making "camcorders" that blend a video camera and a VCR into a single portable package.
"I do not hesitate to single out 8 mm video as a trendsetter for 1986," said Sony Corp. of America Chairman Kenji Tamiya in a recent interview. "Just as the compact disc player plays an important role in saving the audio industry, 8 mm products will restore the video industry," he said.
"We were overwhelmed at Christmas," said Alan Czeizler, national sales manager for Canon, which makes camcorders. "This will be the year consumers realize that this is the direction the industry is taking."
The EIA predicts camcorder sales will jump from 400,000 last year to more than 800,000 in 1986.
Another potential growth market this year should be hand-held television sets. Using liquid crystal technology rather than a miniature television tube, several Japanese companies -- notably Citizen, Casio and Panasonic -- are now manufacturing low cost pocket TVs in quantity. Both Casio and Citizen are now selling pocket TVs with 2.5 inch diagonal screens for under $100.
Last year, barely 200,000 pocket TVs were sold, according to Citizen's John Witt. This year, he predicts over 1.5 million will be sold. Witt predicted that pocket TVs, advertised as "electronic jewelry," will be the "biggest division" in the $1.2 billion-a-year company in three years. He adds that Citizen's pocket TVs even have attachments for VCRs.
"We opened the pocket TV category with the Sony Watchman , but our own market share is now nil," says Dick Komiyama, president of Sony's display division, which intends to launch a new pocket television product.
While pocket TVs are poised for growth, satellite dish sales have shown surprising strength and the EIA forecasts that more than 700,000 satellite antennae should be installed this year.
Home computers, once the darling of this show, have sharply declined. According to EIA figures, home computer companies now take up 40 percent less exhibit space than they did at last year's show -- a reflection of the continuing industry shakeout. Commodore International, the troubled leader of the home computer industry, chose not to exhibit here.