At 5 in the morning on Black Friday, about 50 or 60 people were lined up at the Apple store in the Glendale Galleria, rising at the crack of dawn to get a special edition iPod Nano Red when the store opened at 6. The impromptu gathering may well have been a signpost for the 2006 holiday selling season. Although several categories of merchandise are expected to be important this year, technology is likely to be a prime sales driver for the season. “We feel consumer electronics is going to be the hottest category this holiday season,” said Mike Gottlieb, a partner in Ernst & Young’s retail services group. “Last year electronics were also a very hot ticket, but the types continue to change. Last year it was DVDs and digital cameras, where this year we’re looking at iPods and all the various accessories, mobile phones and all the varieties and functions they provide, high definition and flat screen TVs and photo printers.” Advancements in technology have long driven consumer demand for these products, but this year it seems new gizmos such as printers for digital photos along with lower prices on flat screen and high definition televisions are combining to persuade customers to loosen their pocketbooks as never before. Beginning with the Sony PSP 3 introduced in November, this season Microsoft and Nintendo have both introduced new video game players. There are phones and personal digital assistants with Bluetooth and other capabilities and features, GPS devices and new MP3 player models, along with Apple’s limited edition iPod Nano Red, where a portion of sales will be donated to the Global Fund to help fight HIV and AIDS in Africa. Prices on digital cameras and televisions have all come down to open the market for those products further still. “These items were discounted throughout the big box stores,” said Gottlieb. “Sales of these are increasing as a proportion of holiday sales, so that is contributing to the overall increases.” Even toys have taken on a new technological twist. Child’s play, which once mimicked grown-ups with toy baking ovens and doctor’s gear, has adapted technology to reflect the things that adults use day-to-day. Consider The Kid-Tough Digital Camera from Fisher-Price, which is sized for tikes and engineered for a child’s rough handling, or the VTech Nitro Notebook, a learning game that looks and operates just like a grown-up computer. “What’s happening this year is they’re taking all the technology available to parents and upgrading the toys,” said Kelly Cullen, a spokeswoman for Toys “R” Us, which is carrying the cameras and computer this year. “Kids want to play in a way that emulates mom and dad.” Although high-tech toys have not taken over the category, they are contributing to what most say will be a very prosperous season for retailers. Ernst is projecting a 6.5 percent sales increase for the November to December season, falling somewhere in the middle of projections that range from 3 percent for same-store sales nationwide from the International Council for Shopping Centers and an overall 8.5 percent increase proffered by Los Angeles County Economic Development Corp. Chief Economist Jack Kyser. Whatever the final results, sales increases will fall short of those that stores rang up during the 2005 season, due in part to energy prices which have had a lingering effect on low- to mid-income consumers. But prognosticators agree that a healthy economy, strong stock market performance, low unemployment and a generally sanguine consumer outlook are all expected to bolster holiday sales this year. “The national confidence surveys are influenced by the Midwest and Southeast, which are impacted by the auto industry,” said Kyser at LAEDC. “L.A. County has been doing surprisingly well sales-wise.” With the exception of Wal-Mart, which had a disappointing season opener this year, the traditional start to the season, the day after Thanksgiving, brought cheer to many different retailers in the local area. At The Oaks in Thousand Oaks, Macy’s and JCPenney both reported sales exceeded estimates. Limited Too! rang in triple digit increases and The Disney Store nearly doubled its business versus last year, said Nicole Schmitt, senior marketing manager. The crowds were also out in force at Disney’s Glendale Galleria store. “Disney opened at 2 a.m. for their friends and family event,” said Janet LaFevre, senior director of marketing for the Galleria. “By the time they opened to the general public at 4 a.m. they easily had well over 250 people. The scene was much the same, if a bit later, at the Galleria’s Penney and Mervyn’s units. “We had about 450 people outside in line for Mervyn’s and another 500 waiting for JCPenney to open,” LaFevre said. Most of the stores that drew the largest crowds were offering deep discounts on Black Friday, so named because it is the day that retailers traditionally ring up enough sales to put them in the black. And retailers and mall operators reported that traffic tapered off considerably as the day and the weekend wore on. But there are also expected to be pockets of strength at full price, including diamond accessories and watches for women. And retailers have kept inventories in tow, all suggesting that the sales this year will not come at the expense of profits. there’s less propensity to deep discount and an expectation that margins will be better. But it’s too early to tell. If the volume of people isn’t there, you’re still going to have to discount to move the inventory.”