Spending on cars, clothing, jewelry, furnishings have moved down 20% or more over the last few months. There has been a lot of research that consumers were still willing to buy video games, PCs, and other electronics.
Now, those categories have joined almost every other in a period of rapid sales contraction.
According to The Wall Street Journal, new data from Forrester Research shows that people are much less likely to buy GPS and smartphones than they were a year ago. Several other categories of products will also be hit hard.
The news has serious consequences for a large number of public companies. It is no coincidence that The Times of London reported that Sony (SNE) is preparing for unprecedented cost cuts.
The stock market has anticipated the news. Shares in Apple (AAPL) and RIM (RIMM) are near 52-week lows. So are the shares of Dell (DELL)
The data could also foreshadow the death of some of the weaker companies in the broader tech category, especially Sirius XM (SIRI) and Palm (PALM). With strong tech companies being crippled, these two don’t have the sales or balance sheets to make it through the year.
Douglas A. McIntyre