As evidence mounts of business slowdowns, it will be tempting to point to "economic weakness" as the reason for consumer and business spending weakness. There will, to be sure, be such effects.But not all spending changes are the result of the near-term economy issues, as some trends predate the such pressures.
Consider consumer buying of digital cameras, camcorders, audio players and hand-held game platforms. Sales of all four categories of devices have been declining for three years.
That could suggest product saturation, with the corollary that upgrades need to move beyond incremental changes. There will continue to be replacement buying, to be sure. But incremental upgrades to memory or megapixels of resolution, for example, might not provide as much sales lift as one might have seen in prior years.
Category saturation is a normal part of the consumer electronics business, which is why consumer electronics retailers always are on the look for the next big "gotta have it" product.
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