Consumer Confidence in High Tech Up. Sure. Big Deal.

Apparently the Consumer Electronics Association (CEA) in conjunction with CNET, our elder sibling site, did a study suggesting that consumer confidence in technology and consumer electronics jumped. But I wager that will mean virtually nothing to companies in the industry.

How can I be so negative? Easily, in this case. The CEA-CNET Index of Consumer Technology Expectations went up six points this month, meaning that it is "near its level from the same period last year" and showing that people are more likely to buy consumer electronics products. Hah.

First of all, near the level of last year? Wasn't that, oh, 2008? A year whose holiday sales were so bad that you would have to draw downward extensions of graphs to show how depressing things got? A season that drove some of the most disappointing earnings results I can remember from high tech companies. You mean we're all the way back up to there?

Great. Looking forward to it already.

Now let's remember that last year, price started going out the window. That trend has only continued this year, with cheap being this year's black. What happens when you sell a whole bunch of cheap stuff? You don't make anywhere near as much money. So it's a lot more units to even stay in the same place.

And now for the other shoe: the overall index of consumer expectations about the broader economy "is down 2.7 points from this time last year, but has climbed in three of the last five months." If general consumer confidence is down, don't expect them to throw caution to the winds so they can take refuge in the land of CE, where everything is emotionally satisfying. Furthermore, if you look at the graphed data as supplied by CEA, things are even more tight-lipped:

Yup, there's currently an uptick in consumer electronics, as there have been before in the last two years. But overall there's a clear trend line downward. This isn't just a 2008 reaction to the credit crisis, but a lowering of consumer expectations, both generally and of the future of high tech. I suspect this holiday season is going to be much tough slugging than many in the industry think -- or are willing to admit.