Consumer electronics have long been among the most popular holiday gifts, with fierce competition among shoppers for day-after-Thanksgiving deals on flat-screen TVs and laptop computers.
This year, everyone expects the economic crisis to dampen the appetite for gadgets. But how much? Compared to buying a car or a house, electronics are cheap, and those who scrimp on big purchases may still treat themselves or their children to an iPod.
At a Circuit City store here Friday morning, Felicia Perry, 38, said she is definitely spending less this season, because her job is offering fewer overtime hours.
But she got an Xbox 360 bundle for her 16-year-old daughter that included the Microsoft gaming console, some games and accessories for $299.
Perry, a manager for Verizon's FiOS TV service who lives in Liverpool, N.Y., said she is staying home more lately, and the Xbox purchase was in part so her daughter can stay home and play on it.
Store manager Steve Fairbrother said home theater and video game items were selling well, in part because people are not going out as much. But overall, Fairbrother said that this Black Friday didn't stack up well against others he's experienced.
"I think this is the worst one we've seen in 11 years," he said, which is the length of time he's worked for the company.
Circuit City filed for bankruptcy protection earlier in November, which may have steered some prospective buyers to rivals.
At the Best Buy store in the same mall, the crowd was about the same size as usual, said Rob Schoeneck, the mall's manager. He estimated there were roughly 1,000 people waiting for the store to open.
Consumers will be 'very choosy'
Earlier in the week, ABI Research analyst Michael Wolf said he expected the usual lines of shoppers outside stores proffering special Black Friday deals, as consumers are more price-conscious than they have been in the past and the deals are the best to be had all year. But he thinks the day could end with consumers spending less than usual.
"I think you're going to see consumers being very choosy. The good deals are going to go, but other than that they're going to be very selective," he said.
At Best Buy, one of the "doorbuster" deals for early birds was for a 50-inch flat-panel TV from Panasonic for $900. The manufacturer slashed its annual profit forecast by 90 percent on Friday, blaming a strong yen, sluggish sales and heavy discounting.
Best Buy was also selling a 32-inch flat-panel TV, the most popular size, for $400. Analysts at NPD Group noted that looking over a few decades, the average price for a TV in the U.S. has been just over $300, and flat panels could reach that level this holiday season, finally cementing them as the mainstream replacement for the cathode-ray tube.
Manufacturers have increased their production capacity for flat panels this year, just as consumer spending is tanking, which should lead to further price cuts as the season goes on, the NPD analysts said.
TV manufacturers have one reason to be hopeful: Sales of new TVs may be bolstered by the impending shutdown of the analog broadcasting network in February, which means that older TVs that use regular antennas will need to be replaced or use a box that converts the signal.
More generally, the decline in gas prices may be raising consumers' willingness to spend up from the absolute bottom.
Michaela Kipp, 42, was at Best Buy to pick up a new HP desktop computer package for $600 and a $380 Toshiba laptop.
Kipp said she'd applied online to get 18 months of interest-free financing for the purchase, and that she hoped to use her income tax return to pay off a good chunk of it.
She estimated that she will spending less this year than she usually does on holiday gifts. Still, "the fact that the gas prices have gone down, I feel confident that I can pay off this without any problems," she said.