From note book computers to camcorders, shoppers are finding room in their budget for consumer electronics.
Figures released in December by the Commerce Department show sales at electronic stores rose 2.8 percent in November--the biggest jump in nearly two years.
A retail analyst based in Emeryville isn't surprised.
"There is a lot of innovative products out there. With innovation people still want that even if the price is still higher than what they might want to spend," said Helen Bulwick from Market Solutions.
It's innovation that's getting smaller and smaller.
"One of the benefits of digital technology is we are now able to take all of our information and entertainment with us just about anywhere because we're getting more memory and more owner in smaller and smaller spaces," said Jim Barry from the Consumer Electronics Association.
Barry says the pocket camcorder is one example of that.
"This is a new one from Kodak. The great thing about these is they're small enough and light enough you will take it with you," said Barry.
The pocket camcorder fits in your pocket or purse and it comes with a little pop out USB connector so you can upload those videos onto the Internet.
The Kodak Z16 records in high definition and retails for $179.
"Technology continues to make it better, so what video cameras become another great example of that. Look at how small they've become, look at how inexpensive they become," said Bulwick.
New digital picture frames have also gotten smaller. The digital foci is no larger than a lot of digital cameras -- others fit right on your key chain.
"So the real idea here is to get those pictures out of your camera, out of your computer and share them with some other folks," said Barry.
Also following the small is better trend is the new category of lap top computers -- the "netbook."
The one from MSI is called the Wind and comes with a ten inch screen, keyboard, Wi-Fi, Bluetooth and a Web cam. It retails for $499.
"These netbooks start at about $350, which is about half the price of most portable computers, notebooks or laptops," said Barry.
The one exception to the small is better trend are digital televisions. Screens are getting bigger and prices are getting smaller. Forty-two Inch screens that sold for $3,000 a year ago now go for $1,100.