Not to talk to our economys proverbial pitcher in the middle of a no hitter,
but it looks like investors can breathe easy as we head into the holiday season.
Consumers are, against all odds, spending. Retail sales in the U.S. were up 7.2%
year-over-year in October, according to a Tuesday report from the Department of
Commerce. Electronics retail saw a particularly impressive bump at the start of
fall, with sales up 3.5% from September and 3.7% year-over-year. Clearly,
consumers like their gadgets. More specifically at least in this case people
like Apple s (NASDAQ: AAPL ) iPhone 4S. The latest model of the Cupertino,
Calif.-based companys famous smartphone has proven a hit with consumers since
its Oct. 14 release. When the device was announced at the beginning of the
month, there was some concern that it would be seen as too incremental an
upgrade over 2010s model, but sales have shown those fears were unfounded. Apple
sold 4 million iPhone 4Ses during the phones first weekend on shelves. That the
iPhone 4S was successful enough on its own to spur a boost in overall
electronics sales is hardly surprising, though. Apples mobile devices have been
incredible drivers for electronics over the past two years. Take April 2010 as a
prime example. Electronics sales saw a 6.9% year-over-year decline in April 2009
that spring, but electronics retail saw a huge boost come 2010 a YOY jump of
9.7%, according to MasterCard Advisors SpendingPulse report . Investors with
long memories will of course recall that April 2010 was the month Apple released
its first iPad tablet computer. The high-priced device moved more than a million
units in its first month on shelves. Total retail sales dipped over May and June
that year, but electronics sales did see a modest uptick in June 2010 with an
increase of 1.3% which Capital Economics analyst Paul Dales attributed to the
iPhone 4 at the time . Of course, the iPhone 4 released on June 24, meaning that
just a few days of sales were enough to give the entire segment a jolt. The iPad
repeated its performance in March 2011 when the iPad 2 released, racking up 1
million in sales during its first week alone, giving electronics retail a 2.7%
YOY bump . According to Sterne Agee analyst Shaw Wu, Octobers huge iPhone 4S
sales havent slowed thanks to the popularity of the phones voice-recognizing
virtual assistant, Siri. Wu expects Apple to sell 26 million iPhones in full
before the year is out. However, the iPhone wont be the only big gun driving
electronics retail through the end of 2011. The iPhone 4S is getting backed up
by a number of heavy hitters. Activision Blizzard s (NASDAQ: ATVI ) indomitable
video game series Call of Duty saw its latest entry, Call of Duty: Modern
Warfare 3 , release last week. The game sold 6.5 million copies in its first day
on shelves, racking up $400 million in sales in the process. Amazon s (NASDAQ:
AMZN ) Kindle Fire, a low-priced iPad competitor, released on Monday, and
analysts are predicting that Amazon will sell 5 million tablets over the next
two months. Add in new BlackBerry entries by Research In Motion (NASDAQ: RIMM ),
as well as another tablet market entry from Barnes & Noble (NYSE: BKS ), and the
sector should be plenty armed through the holiday season. What about the
post-holiday slump? Will electronics retail sag once the gift giving season is
over and the major, post-iPhone 4S releases have tapered off? Maybe. But expect
the segment to be in full growth swing again in March. Thats when Apple is
expected to deliver the iPad 3 . As of this writing, Anthony John Agnello did
not own a position in any of the aforementioned stocks. Follow him on Twitter
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