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Economy has mixed effect
Rebates help, but consumer spending unstable
DALLAS -- Tax rebates will impact sales of high-definition TVs and personal computers this year, but economic concerns among consumers will limit the growth to more modest levels, according to Parks Associates' Consumer Electronics Purchases: Quarterly Monitor.
"Consumer sentiment regarding CE purchases is mixed," said Kurt Scherf, vice president, principal analyst, Parks Associates. "The tax rebate will boost some sales, but we are seeing pronounced signs of spending restraint among consumers as they feel more uncertainty about the country's economy."
According to the study, 40 percent of consumers in U.S. Internet households will use the tax rebate to purchase consumer electronics products, but 42 percent cited economic concerns as a factor in their decision not to purchase CE this year. Still, consumers indicated they will limit spending in other areas before cutting home communication and entertainment services.
"Consumers are more likely to cut expenditure on groceries than on home communication and entertainment services," Scherf said. "Purchase intentions for HDTVs and PCs are high -- both overall and specifically with the tax rebate -- but these purchases will be sacrificed first if the economy sours further. Less likely to be cut are purchases of mobile and personal electronics, such as game consoles, GPS, and portable media players."
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