ARLINGTON, VA -- Factory sales of consumer electronics will reach a new high of $135.4 billion in 2006, according to the Consumer Electronics Association. The trade group issued its forecast ahead of the annual International Consumer Electronics Show, the world's largest consumer technology trade show.

"The numbers say it all -- the consumer electronics industry is hot," said Gary Shapiro, CEA's president and CEO. "Sales exceeded our expectations in 2005, totaling $125.9 billion and we're forecasting 8% growth in 2006. Consumer electronics sales are consistently growing, breaking records every year, because our industry is constantly changing to provide products that consumers love and can't live without."

According to the report, 2005 totals were up 11% over year-over-year and beat CEA's initial guidance of $122 billion. CEA attributes much of the growth in 2005 to next-generation product lines and innovations to wireless devices, flat panel displays, MP3 devices and gaming consoles and software.

CEA projects that sales of digital television will continue to drive sales to new heights in 2006, forecasting total sales to surpass $23 billion and 18 million units. DTV sales in 2005 grew 60% to $17 billion. This growth is attributable to the growing popularity and competitive price declines of flat panel displays such as LCD and plasma. Combined, these displays accounted for 40% of all DTV sales. Analog and digital LCD TVs combined for $3 billion and four million units. Plasma TVs sold nearly two million units for a total of $4 billion. HDTV continues to claim 85% of the total DTV market.

Launches of next-generation gaming consoles will continue throughout early 2006, pushing the gaming market to $14 billion. The gaming category experienced healthy growth in 2005 with total shipment revenues of $12 billion as the first releases of next-generation gaming consoles and compatible software titles hit dealer shelves.

CEA also forecasts a continued strong market for MP3 players as devices with video playback capability grab the attention of consumers.

Sales of MP3 players are forecast to rise to $4.5 billion in 2006, with 30% of all MP3 players sold having video playback capability. In a statement, CEA director of industry analysis Sean Wargo said, "MP3 technology helped boost the audio and accessories markets in 2005. With the introduction of video playback capability, MP3 player sales surged 200% in 2005 to $3 billion. Trends in 2006 should be no different."

CEA is predicting that total wireless handset sales will exceed $16 billion in factory-to-dealer sales this year. Wireless communications devices such as telephones drove the CE industry in 2005, largely in part to the introduction of phones that have multiple features and functions. Many phones now come equipped with digital cameras and camcorders, MP3 players, GPS navigation, live TV capability and even serve as portable modem connections. Some 104 million wireless handsets were sold in 2005, worth some $13.5 billion.