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By Jeremy Glaser | 01-07-2011 04:06 PM

Will Consumers Take a Chance on New Technology?

Morningstar markets editor Jeremy Glaser finds encouraging signs for global consumer-electronics spending at the recent CES in Las Vegas.

Jeremy Glaser: For Morningstar, I'm Jeremy Glaser. I'm here at the Consumer Electronics Show in Las Vegas.

One of the questions on a lot of investors' mind, and not just tech investors, is what's the state of the consumer? Consumer spending is obviously a pivotal part of the economic recovery. Until we see a robust recovery in spending, we're unlikely see a robust recovery in the rest of the economy.

I think everything we've seen at CES so far points to the fact that consumers appear to be ready to open their wallets little bit more and take some chances on new tech products.

Really all of the major manufacturers are releasing a lot of very high-end products. Instead of really trying to focus on value or trying to focus on stripping features out, so that people might be able to afford that new flat panel TV, [manufacturers] are focused on giving new features, new connectivity, and new ways for people to part from their money. And they're seeing really good uptake in this.

We saw some data that the holiday season was great for tech products; they were some of the most wished-for items for Christmas, and I think a lot of people got what they wanted. That certainly, I think, points to people willing to be a little bit more open, willing to upgrade, willing to go that extra mile. And I think we've seen this in a couple different categories.

The first category is certainly smartphones. I think that's one that everyone has seen the proliferation. We went from simple-feature phones, the flip phone with the numeric keyboard, to really your next step up, so your smart messaging phones that have keyboards, that have a little bit more features, and even into the full-fledged smartphones.

Both in the United States and abroad, people really want these full-feature devices: they want two cameras, they want an enormous screen, they want to be able to get on the fastest network, and they're willing to spend for that.

And I think if the consumer was really, really worried, this wouldn't be a super-high priority for them. I think everyone enjoys having their smartphone, but it's obviously a step up from the basic needs of housing, food, and shelter when you're starting to worry about having that kind of tech products.

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