The boom in wireless headphones and big — really big — TVs over the holidays is expected to carry over into this year, setting the stage for what had been shaping up to be a banner year for consumer electronics sales.
Even with unanticipated roadblocks, it still could be, especially with newer technologies such as 5G being embedded in phones and smart devices such as doorbells, locks and smartwatches hitting a sweet spot. The long-awaited release of PlayStation and Xbox consoles, which many expect to hit shelves before the holidays, also could provide an uptick in the latter part of the year.
As the only national retailer left devoted to the category, Richfield-based Best Buy is well-positioned to benefit from the potential growth.
But the rosy outlook has become murkier in recent weeks amid the outbreak of the coronavirus in China, the biggest source of consumer electronics in the world. More than half of Best Buy's products by revenue are produced or assembled in China.
That makes the overall picture much trickier, said UBS analyst Michael Lasser.
"Overall, demand should be healthy," he wrote in a recent research report. "But, with new mobile and console launches weighted to the back half of the year, there could be a near-term lull. Also, the coronavirus may negatively impact the [consumer electronics] supply chain."
Apple warned investors last week that it doesn't expect to meet its revenue projections for the first months of the year as production in China resumes more slowly than anticipated, potentially leading to a temporary shortage of iPhones. Most of Apple's products are assembled in China, a country that has also become an increasingly important market on the consumer end as well.
Apple's relationship with China is similar to many American companies, and the ripple effects of the deadly illness that has led to factory and store closures across China is starting to be felt across a swath of industries from car manufacturing to medical devices to luxury brands.