An Upgrade Trend Increases U.S. Sales Of Electronic Wares; 2005 Factory Sales Soar 11%; Instead of a $50 portable CD player, people buying $250 digital music players.(INTERNET & TECHNOLOGY)

Byline: PATRICK SEITZ

Flat-panel TV sets and portable MP3 music players helped drive U.S. factory sales of consumer electronics to a record $125.9 billion last year, an 11% increase over 2004.

Sales are expected to rise 7.5% this year to $135.3 billion, according to the Consumer Electronics Association. The CEA released its sales projections before its giant Consumer Electronics Show in Las Vegas, which officially opens Thursday.

More than 2,500 exhibitors are showing off wares at the nation's largest tech conference. More than 20,000 products will debut at the show, says Sean Wargo, an analyst with the CEA.

This year's projection lags the percentage rise of the last two years, but is above recent averages for a huge industry that saw mostly flat sales from 2000 through 2003.

Industry sales are getting a boost from a host of products where consumers see the need to upgrade. The new products carry higher average prices than the technologies they replace, Wargo says.

Instead of buying a $50 portable CD player, people are spending $250 for a small MP3 player like Apple Computer's iPod, Wargo says. Instead of a 27-inch CRT television for $250, they're buying a 27-inch LCD TV for $799. People also are moving from $500 desktop computers to laptops costing $750 or more, he says.