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“E-commerce has been on fire since its inception and it still continues to grow and outpace the overall retail economy,” said Sucharita Mulpuru, an analyst with Forrester, who studied recent trends to come up with this year’s holiday forecast. “And because e-commerce is growing so much faster, it’s taking share from the offline world. It takes more share during Q4 than the rest of the year.”

In the report, Mulpuru concluded that the number of online shoppers in the U.S. will grow a modest 3 percent, but that the average shopper will spend $419 online this holiday, a 12 percent boost over 2011.

Overall, if spending does increase 15 percent this holiday, the rate of increase will be flat compared to the prior year, but the gains are still very impressive given the much larger base (see chart below). It also points to the fact that e-commerce still makes up only a small fraction of overall retail spending.

There are three factors driving consumers to spend more online this year:

• Online vs. offline: Customers would rather shop online to take advantage of the sales and to avoid crowds.
• Mobile commerce: Smartphones and tablets will likely make up 40 percent or more of traffic to a retailer’s site on the major shopping days as consumers get offers sent to them by email and check them out wherever they are. Still, conversion rates are fairly low, Mulpuru said.
• The economy: Overall, holiday retail estimates are extremely positive and consumer confidence scores hit a six-month high in October.

Still, the trend largely benefits online-only retailers, like Amazon, which means that physical retailers must come up with a plan to keep consumers coming to the stores or their Web sites.

Target and Best Buy are two of the big-box retailers that have committed to matching online prices to prevent “showrooming,” where people scan barcodes in the store to find better deals for the same product online. PayPal is also supporting price matching for customers who use the payment provider to make purchases. And Walmart is experimenting with same-day delivery in some markets to fuel its online transactions.

Mulpuru said she wasn’t sure if stunts like that would move the needle, but agreed that “the biggest reason why Amazon is gaining share is because of price, free shipping and doing it quickly.” She said Amazon is willing to subsidize those costs and to spend more to acquire and retain those customers. However, she said, there is some backlash from manufacturers. Companies like Samsung and Sony have started a universal price protection program, where they guarantee the same price no matter where you shop.

“That’s been long overdue,” she said. “There’s been a lot of monkeying around with what’s the right price. With mobile, price is transparent. Up until now, the manufacturer hasn’t had to enforce pricing.”

When I first moved to New York 15 years ago, for a few years during the holiday season I’d be asked by people from elsewhere if I’d be among the throngs in the Times Square crowd, watching and cheering as the ball drops. I’ve never done it, and I probably never will. I dislike crowds and I dislike standing in one place for hours on end with nothing to do but cheer. And the Times Square area is, for me, my work environment, and during the holidays I’d rather be at home, which for me means uptown and out of the way.

I’ve worked in Rockefeller Center, mere blocks from Times Square, for about six years now, and watched as the size and density of the crowds of visiting tourists have seemed to increase incrementally during the holiday season each year.

It wasn’t my imagination. New York City’s own official statisticians say that 48.8 million people visited the city in 2010, up from fewer than 43 million in 2005 when I became a Midtown regular. The forecast for 2011 is 50.2 million. Assuming the forecast is correct, the city will have beat by four years Mayor Mike Bloomberg’s goal, set in 2008, of attracting 50 million visitors by 2015. These same statisticians say that one out of every three international visitors to the United States comes to New York City.

And that ball has a lot to do with it. It’s said that 1 billion people will watch the ball drop in Times Square tonight on television. This I usually watch, and not because I’m a Ryan Seacrest fan. But for some reason that makes little logical sense, I enjoy seeing the part of the city where I spend so much of my daily life being enjoyed by so many people. I like seeing my adopted home town being the center of the world’s attention.

So what about that ball? It was replaced last year, and has some pretty impressive specifications. As Scientific American tells it, it is 12 feet in diameter and weighs nearly six tons, or 11,875 pounds.

It’s made up of 2,688 Waterford crystal triangles, and is lit by 32,256 Philips Luxeon LED lights, which is apparently triple the number of lights on the ball last year. All those lights — and being LEDs they’re programmable — are capable of producing 16 million colors, with the number of theoretical combinations numbering in the billions. It’s also more energy efficient — by somewhere between 10 to 20 percent — than it was last year, and consumes about the same amount of power as is required to power two typical electric home ovens. For the geekier minded among you, there’s even more to know in this article in PDF format from something called Lighting Science. It hadn’t occurred to me, for instance, that since the ball is on display year-round that it would require significant cooling during the hotter days of summer.

It has come a long way from the original ball in 1907, which had 120 25-watt light bulbs on it. There’s a picture of one from 1978 included with this long history of the whole ball-dropping tradition.

If you’re in or around Times Square in the days leading up to New Year’s Eve, and have the presence of mind to look up, you can probably see one of many test drops of the ball. I found this Associated Press video covering one such test, via the Village Voice.

And if you’re not near a TV, you can of course catch a live stream of the festivities.

Happy New Year, everyone.

(Image of the 2007-vintage ball via Wikipedia.)

The Monday after Thanksgiving is one of the busiest online shopping days of the year as everyone returns to work and gets online.

But according to a study conducted by IBM, which analyzed data from more than 500 leading U.S. retailers, mobile is playing a larger role in consumers’ shopping habits, especially around the holidays.

The study found that traffic to retail sites from mobile devices is expected to more than double this month from last season, reaching 15 percent of all visits to retail sites. Last year on Cyber Monday, mobile visits totaled only 3.9 percent.

Of course, mobile is benefiting from the overall trend toward shopping online instead of shopping at the mall. A comScore report released earlier this week found that e-commerce spending was up 13 percent in the third quarter, compared to the same quarter a year earlier, to $36.3 billion.

But in particular, the IBM study says it’s also increasing because of smartphone and iPad penetration. Last month, iPad conversion rates reached 6.8 percent compared to the 3.6 percent conversion rate found for all mobile devices as a category.

This year, the statistics will be supported even more by more iPad sales. A year ago, the iPad was only eight months old. Separately, next week Amazon will be shipping its own tablet, the Kindle Fire, to consumers. If there’s a tablet that’s good for shopping, I’d bet Amazon would make it.

Other findings from the IBM study:

• In October, 10.7 percent of people who logged on to a retailer’s site used a mobile device, up from the 4.2 percent recorded in the same month in 2010.
• Additionally, mobile sales are growing, reaching a high of 9.6 percent in October 2011, up from 3.4 percent in October 2010.
• Social commerce is not seeing as much growth. Facebook accounted for 77 percent of all traffic from social sites, but only 9.2 percent of consumers who visited a retailer site from a social site made a purchase.

Unceremoniously killed under HP’s prior CEO on Aug. 18 after disappointing sales, the device quickly found a market after retailers and HP itself slashed the prices on remaining stock.

This time, according to a Best Buy press release, a 32 gigabyte TouchPad is going for $149, with the purchase of an HP- or Compaq-branded notebook or desktop PC. Sold separately, the price jumps to $599.99.

HP, for its part, has sold out of its internal stock of the device, according to a statement on the company’s Web site. TouchPads can, however, still be found on Amazon and on eBay.

By bundling the TouchPad with PCs at its biggest retail partner, HP is giving itself an arguable edge against Acer, Dell and Toshiba in what is sure to be a cutthroat holiday season for PC and tablet sales. After about a month on the market, and before the product wound up on the chopping block, Best Buy sold less than 10 percent of the 270,000 TouchPads it had in inventory.

It’s hard to know how long the deal can last. Sources familiar with HP’s build plans say the initial TouchPad order was for between 1.8 million and two million units, though a third source disputed that number without elaborating. Regardless of the number ordered, sources familiar with the deal say that HP’s decision to kill the product had no immediate effect on the build plans, as components had already been purchased and manufacturing was under way. A source familiar with the matter says the manufacturer is Taiwan-based Inventec, not Compal, as has been previously reported. HP was contractually obligated to take delivery on the remaining units in the pipeline.

That means the TouchPad is now officially a loss leader. As an IHS iSuppli teardown analysis in August showed, HP’s cost to build a 32GB TouchPad is $328.65. At $149.99, HP takes a paper loss of more than $178 per unit.

HP isn’t exactly crying over the lost money. Remember that as part of the hot mess of news it announced on Aug. 18, the company included plans for a $1 billion charge to account for costs related to shutting down the TouchPad and webOS hardware business.

Whatever happens, this is probably the last hurrah for the TouchPad — for real this time. That is, unless no one takes advantage of the offer to buy one along with a PC. Any stock left over after the holiday season rush will probably wind up in Best Buy’s equivalent of the bargain bin.

“This early data, along with our assumptions for international Mac sales, which are growing faster than domestic Mac sales, and the final 2 months of the quarter, implies (year over year) Mac unit growth of 22%-28%, in line with the Street at about 24% y/y growth,” Munster wrote, adding Apple may see an additional bump thanks to the new MacBook Air. “We note that the all new 11″ MacBook Air launched on 10/20 alongside a redesigned 13″ model, and we believe the first full month of new MacBook Airs (Nov.) could also drive unit growth in the quarter.”

“This set of hardware specs beat anything available to date on the tablet market,” Steven Li at Raymond James said in a research note issued today. “We believe the PlayBook tablet shows RIM is starting to compete effectively on hardware specs.”

RBC analyst Mike Abramsky offered a similar opinion, describing PlayBook’s specs as “leading-edge” and arguing that the device is well positioned for enterprise. “PlayBook may be cheaper, more productive than iPad for enterprises to deploy,” he observed, noting that the device requires no additional licenses or carrier costs and leverages existing corporate apps and infrastructure. Abramsky’s preliminarily estimate has RIM selling as many as six million PlayBooks in its first year at market.

Brian Modoff of Deutsche Bank said the company’s new OS has a lot of potential, likely making it easier for developers to write for the device and future products that use it.

Finally, over at Susquehanna, analyst Jeffrey Fidacaro talked up the device’s new QNX operating system, which sounds promising, though he noted that the transition to it could take some time, slowing the development of its app ecosystem.

“An app developer contact who works closely with RIM described the recently acquired QNX OS as “rock solid” as it was designed for mission critical applications, and felt that the SDK allowed for applications to be ported over fairly easily,” Fidacaro wrote. “The QNX OS is Unix-based and supports POSIX (easy portability of code) and OpenGL (3D graphics). We view RIM’s transition to a new OS positively as the Blackberry OS was antiquated, which apparently was not fully resolved with the recently launched Blackberry 6. However, we estimate the transition period to fully upgrade RIM’s 50+ mln subscriber base to the new platform to take at least two years. Furthermore, it is uncertain how easy RIM can port its proprietary technologies, such as security and compression, to the QNX platform.”

And that’s the real problem RIM (RIMM) is facing here: PlayBook is late to the game, and, as impressive as its specs might be, the timing of its launch– early 2011–may prove to be a real detriment. “With the PlayBook only available for consumers after the holiday season, we view this as a mild disappointment,” T. Michael Walkley of Canaccord Adams said in a note to clients Tuesday. “As such, we remain cautious in modeling RIM tablet sales due to the intensifying tablet competition and uncertain demand for this product.”

The Wal-Mart Stores Inc. (WMT) membership warehouse chain’s more than 500 clubs will be outfitted with Wi-Fi by November. The move is testament to Sam’s Club’s high hopes for Internet TV sets and other Web-enabled devices this holiday shopping season.

By providing Wi-Fi, Sam’s Club says it hopes to help customers better understand such products, which are still relatively new to the market. “This will allow a member to walk up to a Samsung LCD Internet-enabled TV and see how to find his Facebook page or stream video from Vudu,” said Sam’s Club Chief Executive Brian Cornell in an interview. “It is an intimidating category with lots of complexity.”

But Wi-Fi also will allow Sam’s Club shoppers more reliable Internet access on their smartphones in the warehouse, where they can find additional information about what they are buying or check competitors’ prices.

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That was way back in October, though, and since then, production delays have slowed the Nook’s entry into the market. The devices were hard to buy online for the 2009 holiday season. And they haven’t been available at all in stores–you could talk to a store rep about one, and if you were lucky, you got to fondle one, but that was it.

Now Barnes & Noble (BKS) says that starting Wednesday, the $259 device will be available in the “majority” of its 775 U.S. stores.

Better late than never. But not a lot better.

Barnes & Noble’s problem, of course, is that in the last couple weeks, the e-reader market has been completely redefined, at least among the chattering classes: It’s now Amazon’s (AMZN) Kindle vs. Apple’s (AAPL) iPad.

It’s still theoretically possible for Barnes & Noble–and Sony (SNE), for that matter, as well as Plastic Logic and the other would-be competitors–to elbow their way in, since the e-book market itself is still pretty young.

But they had better move very, very fast. Even if they offer devices that are as good or better than Apple’s or Amazon’s, they’ll be hard-pressed to combat the other huge advantages those two have over the rest of the pack–established e-commerce relationships with a huge customer base.

For the year, the company said, buyers and sellers did around $500 million worth of transactions using their phones.

I assume Amazon (AMZN) saw a similar trend, particularly since it rolled out well-received shopping apps for both Research in Motion’s (RIMM) BlackBerry and Apple’s (AAPL) iPhone this year.

But note that for whatever reason, Amazon doesn’t mention mobile in its annual “let us tell you how awesome are holiday sales were, without actually attaching any real numbers to these claims” release.

[Image credit: ktylerconk]

In addition to the obvious pain this brings to last-minute Christmas shoppers and the e-commerce sites that rely on them, the attack had a larger effect: Many Web 2.0 companies that rely on Amazon’s cloud computing services to power their sites were also disrupted during the attack.

That said, the incident seems resolved now, and assuming we don’t see any catastrophes in the last few hours before Christmas, e-commerce companies are going to end up doing pretty well during this holiday season. ComScore (SCOR) estimates that sales are up four percent this year.

The iPod Touch offers the best options for young kids.

I’m a big fan of old-fashioned analog activities—books and crayons—but they’re not enough when you’re cooped up for six hours on a plane. In advance of a cross-country flight on Wednesday, my two kids and I spent several days trying out the most versatile and convenient gadget—offering movies, games and other electronic media—for keeping us entertained.

We looked at Apple’s iPod Touch, a Sony (SNE) PSPgo and a Nintendo DSi. Sony and Nintendo have updated their PlayStation Portable and DS game players with features aimed at going beyond traditional gaming. Apple (AAPL) is been promoting the iPod touch’s game capabilities.

Nintendo has done a lot to push the boundaries of gaming, with the Wii and other products. But the $169.99 DSi isn’t the entertainment Swiss army knife the iPod Touch and PSPgo are. It doesn’t play movies, for example—a big minus for my 2-year-old son, who is too young to be patient with most games.

It’s still a fun game-player, though, with popular titles for young kids, including two that are big with my 6-year-old daughter: the Nintendogs virtual pet and Pokemon adventure games, which run about $30 a title. One big change Nintendo made to the DSi is the addition of two cameras that are used in fun games, like the ones that put a player’s photo alongside other characters. One simple camera application lets you distort and doodle on images.

Nintendo and Sony also have followed the lead of the App Store—Apple’s online clearinghouse for iPhone and iPod Touch software—by letting users download software directly to the DSi and PSPgo over a Wi-Fi connection. It is more convenient than keeping track of a lot of external game cartridges and discs. Compared with the more than 100,000 titles in the App Store, however, Nintendo’s DSi Shop is sparsely stocked. It had only two free applications and about 90 titles, mostly costing $2 to $8.

One free DSi titles, Flipnote Studio, was a huge hit with my 6-year-old. It let her create an electronic version of an old-fashioned flip book, where you animate sketches by flipping pages. The DSi has only 256 megabytes of built-in storage, good for about a dozen games, though users can expand that with a storage card.

With the $249.99 PSPgo, Sony got rid of the old proprietary disc format for movies and games used in older PSP models, replacing it with 16 gigabytes of built-in flash storage onto which users can download games, movies and other content. The change allowed Sony to make a sleeker device with controls that slide away under its crisp color display.

The iPod Touch is still slimmer and easier to tuck into a pocket. A model with eight gigabytes sells for $199, while one with 32 gigabytes sells for $299.

The PSPgo’s display is slightly wider than that on the iPod Touch, but isn’t touch-sensitive. Still, the PSPgo and iPod Touch are fine for watching movies. They’re more convenient on airplanes than fumbling with a laptop and DVDs. And users can wirelessly download movies and games onto the PSPgo from Sony’s online PlayStation Store. I found it faster, though, to do the transaction on my PC over a wired Internet connection, and load the material onto the PSPgo over a USB cable with Sony’s version of Apple’s iTunes application, called Media Go. Media Go runs only on Windows.

Prices for movies on the iTunes and PlayStation Stores were mostly the same at $14.99 for new releases and $9.99 for older ones. Rentals are $3.99. Both stores had a similar selection of new releases, but the PlayStation Store lacked some kid titles that were on iTunes, such as “Toy Story.” There is also a directory of free podcasts on iTunes that makes it easy to download free videos to the iPod Touch, including kid-friendly material such as NASA space-shuttle landings and “Sesame Street” clips.

Games for PSPgo tend to be more intricate than those for iPod Touch, but that comes at a price. While Sony sells cheaper games, many are in the $19 to $30 range. I liked an adventure game called “Little Big Planet” starring a character called Sack Boy—for $39.99.

That price is steep compared with all the inexpensive and free content on the App Store for the iPod Touch. My kids liked a lot of it: a free dress-up game called “Dress Chica” and a $1.99 snowball-fight game called “Grinchmas.” My son particularly loved a free, beautifully illustrated short book called “Voodoo Doll’s Halloween Story.” My 6-year-old spent hours with a free math-drills program.

I found the iPod Touch offers the best entertainment options for young kids at bargain prices. And that is a gift for parents.

Email Nick.Wingfield@wsj.com. Walt Mossberg is on vacation.

Thomas Weisel Partners visited 41 Apple (AAPL) retail locations in the United States, Canada and the U.K. over the weekend and was impressed by what it saw: “robust sales driven by sustained brand strength, rising demand for app-ready iPod touches and a positive-mix in Macs driven by Black Friday discounting.”

The research house says its checks suggest that same-store sales are up slightly year-over-year, driven by unflagging demand for the iPhone, among other things.

“While competition continues to intensify as new Android devices ramp our early holiday season analysis suggests upside exists to our Dec. quarter iPhone unit estimate of 8.2 million driven by growth in the broader smartphone market and overall market share gains by iPhone,” analyst Doug Reid explained in a note to clients.

“Although we see evidence of a strong early ramp by products which compete against iPhone, notably Droid on Verizon in the United States,” Reid added, “our checks indicate sales of iPhone remain strong in Europe and are accelerating off a low base in Asia.”

And what of Mac sales? With just one month of data, it’s a bit too early to make a call on the quarter–especially when nearly 50 percent of Mac sales in this quarter typically occur in the month of December. That said, Thomas Weisel expects Mac sales to be quite strong on increased demand for notebooks–specifically the MacBook Pro.

“Following checks we estimate that at 21 of the 41 stores (51%) MacBook Pro (led by the lower end 13” model) out-sold the recently introduced $999 MacBook. We had expected the lower ASP MacBook to outsell the Pro by 70% to 30%,” Reid wrote.

“The strength in Pro sales is consistent with Apple’s unexpected move to discount the MacBook Pro line but not the MacBook (resulting in a selling price for the 13″ MacBook Pro of $1098 in the United States, only $99 more than the $999 MacBook). We believe that Apple continues to benefit from the strong consumer PC demand that we saw in the Sep quarter.”

But even though they are expected to spend more this season than during last year’s downtrodden holiday season, consumers are likely to keep their online spending tempered, the group said.

ComScore said consumers spent $8.21 billion online from Nov. 1-22, a 2 percent jump from the same period a year earlier. It expects the total for both November and December to reach $28.8 billion, a 3 percent gain from last year’s holiday season. Results fell 3 percent last year and comScore noted prior-years growth was 20 percent or higher.

“Online spending this holiday season will likely be tempered by the stark reality of 10 percent unemployment and less disposable income in many consumers’ wallets,” said comScore Chairman Gian Fulgoni.

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“Most stores we contacted reported strong follow-through sales last week and have received ‘re-stocks’ following the initial launch,” says McKechnie. “We had guesstimated ~ 200k Verizon-only ‘sell in’ prior to the launch. We now expect at least another 200k by Black Friday and 150-200k through the remainder of the holiday season, which gets us to our 600k forecast for the quarter. All stores appear ‘well stocked’ with none reporting shortages….Our checks with stores indicate no issues with returns of the Droid.”

Evidently, Verizon’s Droid saturation campaign, with a budget estimated at $100 million, is paying off–despite its impersonal sci-fi positioning.