Americans fall out of love with gadgets – consumer spending way down

In case you haven’t noticed, the US economy is tanking an Olympic nose dive into recession. For those of you outside the US, you’ve probably heard about our Yankee troubles (if you haven’t felt the financial pinch in the stock market already). There doesn’t seem to be a quick solution to bring the US economy back to full health, and consumers are reacting accordingly.

The newest bit of research out of ChangeWave indicates a huge consumer pull-back on consumer electronics expenditures – the largest decline in gadget spending since 2002. ChangeWave surveyed 4,427 consumers, during February 18-25, to gauge discretionary spending on a range of popular electronic devices, including mobile phones, video game consoles, digital cameras and iPods. “These results clearly show that the consumer electronics sector is getting whacked,” said Tobin Smith, founder of ChangeWave Research and editor of ChangeWave Investing.

Of those surveyed, only 19% indicated that they’d increase their spending on consumer electronics, while a significant 33% will be spending less and saving more. Big-chain retailers will take the biggest hit, while merchants like Costco and Walmart will brave the economic downturn and maintain their gadget market share.

Spending on mobile phones will take a hit with fewer people spending money on a new handset.  Only 8% of survey respondents indicated that they’d be buying a new handset in the next 90 days – down from 14% previously. That means there will most likely be fewer handsets sold in the US in the coming months – unless the economy takes a magical upward swing. Sony Ericsson (NYSE: SNE) had better hope that Americans are going to turn around and start spending more on mobile phones if SE wants to increase their handset sales volume.

Now, most anyone reading this will probably contradict the survey – as enthusiasts, the latest and greatest in mobile is a must-have. I’m personally going to be making a new handset purchase in the next few months (3G iPhone? Please, Apple (NSDQ: AAPL)?), and I’d be willing to bet that a fair number of you readers will be picking up a shiny new cellphone in the near future. But, the US, as a whole, will be forgoing that new mobile phone in favor of bills, debt payments, and food. Did I mention how much gas costs these days?

[Via: ChangeWave]