Will shoppers spend big this holiday season? Tech executives and analysts are oddly unsure headed into Black Friday – Fortune

Happy Thanksgiving Eve, Data Sheet readers. A quick note that we’ll be stuffing our face with turkey on Thursday and (hopefully) reveling in a World Cup victory over England upon Friday, among other activities. As such, we’ll be off those two days and return on Monday.

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In the true spirit of the holidays, let’s explore the odd forecast for the ultimate post-Thanksgiving tradition: buying copious amounts of consumer electronics.

While a tumultuous 2022 nears an end for tech companies, the particular outlook with regard to Black Friday through Cyber Monday looks as cloudy as congealed gravy. Some companies plus analysts are predicting an unpleasant downturn in sales. Some see prospects for a surprisingly solid season. Others are grasping regarding signs associated with any consistent trends.

The uncertainty reflects a whole host of factors converging at the peak period intended for electronics shopping.  

People are reluctant to spend too much in a high-inflation environment, yet they’re still getting paychecks with unemployment rates remaining low. Many tech companies have excess inventory , allowing them to offer steeper-than-normal discounts, but such promos will cut into margins. Consumers snapped up electronics in the early days from the pandemic, fueled by stay-at-home orders and stimulus orders, but the product renewal cycle never stops.  

“Surprisingly, earlier season technology sales have been slow—straying from the particular trend of the last few years, ” Paul Gagnon, the consumer technology industry advisor for the global market information firm NPD, said this week . “Consumers may be waiting for more traditional deeper discount rates on Dark Friday plus Cyber Mon this year. Therefore, sales could grow against a softer Black Friday period the last couple of years. ”

By now, a few universal truths about this shopping season have emerged.

Expectations for personal computer sales are undeniably bleak, largely because consumers bought all the PCs they needed over the past two years. HP issued a holiday-quarter earnings forecast Tuesday that fell short of Wall Street expectations , pairing the announcement with plans to lay off up to 10% of its workforce in anticipation of a prolonged slowdown. Meanwhile, Dell officials on Monday projected year-over-year fourth quarter sales would decline somewhere around 15%.

The outlook for video game sales isn’t quite as dire, but it’s underwhelming nonetheless. The Wall Road Journal reported Wednesday that the industry executives “issued sober outlooks for the current one fourth, ” while inflation-afflicted gamers pare back their purchases and spend less time on the couch.

On the plus side, consumers should benefit from the particular current macroeconomic conditions. Retailers and producers are looking in order to offload the build-up associated with inventory following a supply chain overcorrection, which should result in good bargains. Adobe predicts that discounts for consumers and electronics will exceed 25%, up from roughly 10% in 2021.

The broader holiday perspective, however , remains murky at best.

Compared to previous years, inflation-weary electronics shoppers generally held away on buys in the pre-Thanksgiving stretch. As a result, a spending dam could give way starting on Black Friday—though there’s no guarantee of the big break.  

The particular National Retail Federation said consumers “continue to show resiliency” despite widespread economic challenges. The organization’s president plus CEO, Matthew Shay, predicted “a solid five-day holiday shopping weekend, ” citing the strong labor market and surplus savings.

Best Buy also buoyed hopes Wednesday of a strong finish to the year, particularly after a modest start to the quarter. CEO Corie Barry told analysts on an earnings cal l that “we expect there will be more customer shopping activity concentrated on Black Friday week, Cyber Monday, and the two weeks leading up to December 25th” when compared in order to prior many years.

Other analysts and retailers, nevertheless , have been more bearish in their forecasts.  

Morgan Stanley survey data released Tuesday suggested shoppers plan to spend 25% less upon consumer electronics and 34% less on luxury goods this vacation season when compared to 2021. Target CEO Brian Cornell stated last week that early signs point to customers remaining cautious with their money, opting to spend upon essentials over discretionary items, such as electronics.

“While already soft, sales trends in our discretionary categories softened even a lot more in the last few weeks of the quarter, a trend that’s persisted into the first few weeks of November, ” Cornell said.

Headed into Dark Friday, this much is clear: it’s a buyer’s market for those with the particular means and desire to invest. Happy hunting.

Want to send thoughts or suggestions to  Data Sheet ?   Drop me a line  here .

Jacob Carpenter

NEWSWORTHY

Hitting their limits. Workers at Foxconn ’s primary Apple iPhone assembly plant fought with security officials Wednesday at the locked-down plant within China, the latest sign of strained tensions within the facility, Bloomberg reported. Videos obtained by Bloomberg showed hundreds of employees clashing with guards in a riot-like scene, culminating with several injuries to staffers. The uprising stemmed in part through frustration along with unpaid wages and fears of COVID infections spreading throughout the plant, which employees have not been able in order to leave since mid-October.

Gone without the trace. Lawyers representing FTX mentioned Tuesday that will a “substantial amount” associated with assets were stolen from the disgraced cryptocurrency exchange’s accounts, lessening the chances that hundreds of thousands of creditors will be paid back, the particular Associated Press reported Tuesday. The exchange’s lawyers, speaking at a bankruptcy court proceeding, called the FTX debacle “one of the most abrupt and difficult company collapses in the history of corporate America. ” They did not elaborate around the amount of stolen assets or identify potential perpetrators.

Edgy about Elon. Marketing data shows about one-third associated with Twitter’s top 100 advertisers have suspended their campaigns within the platform following Elon Musk ’s takeover, the Washington Post documented. The data through digital marketing intelligence firm Pathmatics demonstrated several prominent global brands haven’t advertised on Twitter in the past 2 weeks, including Mars , Merck , and Verizon . Numerous advertisers possess voiced concern about Musk’s changes to Twitter as well as the potential negative impact on their manufacturers, while Musk has accused those companies of caving to activist groups.

Empire State strikes back. New York Gov. Kathy Hochul signed into law Wednesday the nation’s first temporary ban on new cryptocurrency mining permits at fossil fuel plants, the New York Times reported. The particular prohibition followed complaints regarding the environmental impact of some cryptocurrency mining operations that require huge amounts of power. Upstate Nyc has become a popular place with regard to mining projects, and the particular new law will not effect existing operations.

FOOD FOR THOUGHT

All new ventures. Andreessen Horowitz, or even a16z as it’s known, stands among Silicon Valley’s venture capital giants—but its founders have got even bigger plans for that company. As detailed in an in-depth report simply by Fortune ’s Jessica Mathews plus Eric Newcomer, the journalist behind the Newcomer newsletter, the firm is launching new initiatives designed to increase its footprint within the finance world, aiming to “position the firm as a sort of Goldman Sachs or J. P. Morgan of the particular West. ” The ambition reflects a16z’s rollicking success from the past decade, the result of shrewd investments in businesses like Facebook, Airbnb , and Lyft . However, the recent downturn in tech fortunes and a shaky-looking headfirst dive into cryptocurrency companies has cooled a16z’s hot streak.  

From the article :

If there is money to be put in order to work in technology, Andreessen Horowitz is there to play with it.  

The firm will launch a  private wealth management service in January, opening the door to invest the personal funds of business executives, according to a source. A public market investing effort is being led by David George, formerly with General Atlantic. And an expanding collection of academics and policy wonks are being added to the particular payroll, which now numbers more than 500 people compared with 240 in July 2021.

IN CASE YOU MISSED IT

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How Annie Jean-Baptiste forces Google to build more inclusive products , simply by Emma Hinchliffe

Big tech has not monopolized big A. I. models, yet Nvidia dominates A. We. hardware , by Jeremy Kahn

Beauty in the eye of the A. I actually.: How inherent racial bias has shaped A. I. and what brands are usually doing to address it , by Gabby Shacknai

You’re the worse driver than a robot: Research shows gaper blocks and looky-loos aren’t an issue with AI , by Travis Loller and the Associated Press

Tesla investors eager for ‘$TSLA Bagholder Therapy’ push Musk with regard to stock buyback after shares lose 2 years of gains , by Dana Hull and Bloomberg

BEFORE YOU GO

The taxman shareth. I wanted to head into the holiday on a cheerful note. I really did. But I couldn’t let the day pass without acknowledging this crackerjack investigation from The Markup, which exposed how high-profile online tax preparation companies are sharing mass amounts of users’ financial data with Facebook, ostensibly in an effort to improve their targeted advertising efforts. The particular report shows that H& R Block , TaxAct , plus TaxSlayer , among others, have employed a Facebook tool—one that’s widely used by the developer community but little-known to the public—to send customers’ personal info towards the social media platform. Typically the type associated with data shared varies simply by company, yet in the most extreme cases, tax firms handed over users’ income and filing status. Several of the firms scrapped or shelved their use of the tool, known as Meta Pixel, following questions from This Markup.