A:

There is strong seasonality in the electronics sector, with sales of nearly all kinds of electronics – computers, digital cameras, electronic toys, cellphones, electric appliances, and audio and video equipment – rising to a sharp peak in November and December due to the Christmas holiday. Along with toys, jewelry and apparel, consumer electronics show some of the strongest seasonal sales trends among all retail products sold.

The electronics industry is a major part of the larger consumer goods sector. The industry is very broad in scope and includes producing everything from batteries (over 40% of all battery sales are made during the Christmas shopping season), to health and fitness devices, to computer systems. The industry overlaps with other important market sectors, including computers and information technology, health care and telecommunications. Major firms in the electronics industry include some of the most important companies listed in major market indexes, specifically major manufacturers such as Sony and General Electric. A significant market development for the industry has been the rise of China, previously only a major producer of electronics, as a growing consumer market.

Consumer electronics sales are considered a bellwether of overall consumer demand and the economy's health, as they tend to be substantially affected by economic cycles. Strong consumer electronics sales are interpreted as a good sign of a healthy economy and are also an important indicator of overall consumer confidence. Consumers tend to make higher dollar value electronics purchases when consumer confidence is high.

The development of new devices, especially in the markets of video equipment, electronic games, cellphones and computer hardware, is an important driver of sales for the electronics sector. Beyond the Christmas holiday season, the largest seasonal sales increases tend to occur in late spring and early summer, when new electronic gadgets that were not developed in time for the most recent Christmas shopping season are often introduced.

The seasonal tendencies for sales of consumer electronics are clear and unmistakable. Approximately 30% of total annual electronics sales are made in the month between the Thanksgiving and Christmas holidays in the United States. This is 10% higher than the average percentage of all retail sales made during the Christmas season, which is usually around 19-20%. The introduction of Cyber Monday to go with Black Friday has sharpened this seasonal tendency. Within the industry, the Christmas shopping season accounts for more than half of the annual sales of electronic toys.

The one segment of the electronics industry that does not follow this seasonal pattern is TV sales. A yearly graph of TV sales actually reveals a slight down slope between October and February, followed by a steadily rising uptrend that peaks in late August to early September, when many manufacturers introduce new models.

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