Tough times put focus on tech 'fixer-uppers'

Chicago Tribune (MCT) - Thanks to the recession, the holidays aren't just about coming home. They're about staying home and saving money until the economy gets better.

The need to cut back on travel or dining out means consumers will be looking for ways to improve their domestic lives. The renewed focus on home entertainment is like "that Shirley Temple effect from the Depression, when everyone went out and escaped to Shirley Temple movies," said Andrew Eisner, director of community at Retrevo, a specialized online search engine for consumer technology purchases. "This time, they're playing games and watching Blu-Ray movies."

Consumer technology gifts are perennial holiday favorites and still account for a significant portion of holiday spending. The National Retail Federation's Black Friday survey showed that 35.9 percent of shoppers bought consumer electronics this year, roughly unchanged from 2007. But consumers are being more selective and making new use of technology they already have at home.

This year will be one of "technology as a fixer-upper," said Stacy DeBroff, the chief executive of Mom Central, a Web site for mothers.

"That's where you see, 'I won't get you the latest iPod, but I'll load up your iTunes,'" DeBroff said. "That's technology augmenting what exists, instead of making a big splurge for something that's new."

A family with Microsoft's Xbox 360, for example, can sign up for Xbox Live service that allows online game-playing, movie and TV show downloading and even the streaming of Netflix films. Desktop owners might choose to upgrade their systems with a new hard drive, monitor or security software. These products might not make flashy gifts, but they can extend the life of a computer.

Cheaper alternatives to a new desktop computer, including notebooks, also should do well, as heavy discounts have brought some laptop prices down to $500 or less. Another possible hot PC alternative is the netbook, a small, lightweight laptop designed for e-mailing and Web surfing that tends to be slightly cheaper than a laptop.

Even portable GPS devices, which were big holiday sellers last year, are part of the "fixer upper" phenomenon.

"GPS has been ramping up tremendously," said Sean Wargo, president of consumer technology consulting firm The Market Sage. "We should see another good holiday for that because consumers aren't buying new cars, so they're outfitting their old cars with new technology."

Meanwhile, gaming systems such as the Wii and the Xbox 360 remain strong sellers this year, particularly because the whole family can play, attracting both kids and seniors. Microsoft said this year's Black Friday was a record-breaking one for the Xbox 360, with console sales jumping 25 percent over 2007 levels.

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Consumer-nesting tendencies might not result in a bump for sales of big-ticket electronics like flat-panel TVs. Market research firm NPD conducted a survey showing that 33 percent of consumers who had been considering buying a large flat-panel TV changed their minds because of the economy.

But prices have declined, so the trend could swing in the other direction if prices continue dropping this month.

Also, the transition from analog to digital TV in February could also cause a spike in holiday sales. "There's almost no reason to hold off any longer if you do have the money," said Heather Dougherty, director of research at Hitwise, which monitors Internet traffic and searches.

For consumers whose shopping budgets are strained, there are affordable ways to consume digital content. Netflix subscribers can stream movies through several different devices, including Blu-Ray players. Apple makes a box that plays rented films from iTunes on a TV set, and Blockbuster has its own set-top box for on-demand service.

Some gadgets will be hits regardless of the economy: Apple's iPhone and the new touchscreen BlackBerry Storm, for example.

Both phones have consumer cachet and, for many consumers, are the primary way they surf the Web while they're on the go.

"People are trying to dramatically reduce their spending on big-ticket items," DeBroff said. "But they still think technology can add flash and sizzle."

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