2009 holiday season shaping up as lackluster

All those hopes that the 2009 holiday season would make up for a dismal 2008 aren't panning out the way merchants and gadget makers had planned.

The prognosis from major electronics retailers isn't exactly grim, but it's hardly rosy. The problem? Consumers may not be quite as miserable as they were last year, but they're still keeping their wallets sealed shut. Specifically: Bargain-hunting is now the call of the day. Consumers will buy merchandise, but only if it's priced at rock bottom.

To be sure, price breaks abound right now. Video game console prices have all been slashed, computers and TVs are dirt cheap, and cell phones are practically being given away (except the iPhone, of course). But those big price cuts mean retailers don't make as much profit on the sales they do make, and have to work harder to earn the same revenue as before.

The Wall Street Journal story linked above also makes another savvy point about the dim hopes for a big Christmas this year: There's really nothing new coming out now that has consumers excited. Aside from Windows 7's imminent arrival, this year's batch of consumer electronics offer "largely incremental technology, such as Internet capability in flat-panel TVs." It's hard to convince someone who spent four figures two years ago on a new television that he needs a new set just because it has a few minor additional options.

As one analyst cogently notes, "The fact is that with most of these products, people already have one. In this environment, retailers are scuffling trying to get customers to buy another."

Oddly, the story notes that one of the bright spots in the gadget market is e-book readers. Spurred on by the success of the Amazon Kindle, e-book readers are allegedly about to flood the market, most attempting to undercut the price on the Kindle (which is only sold by one retailer) without sacrificing features. Whether people buy them remains a question mark.

Ultra-cheap Blu-ray players and digital cameras are also cited as areas of better-than-average demand.

What are your holiday shopping plans?