When the digital-TV transition takes effect in February 2009, consumers with analog-only sets will need converter boxes to maintain over-the-air service.
But, while LG Electronics plans to sell low-cost boxes at retail stores aimed at those poor souls without digital service, Samsung is taking a different tack.
Targeting tech-savvy early adopters—who already have digital service but want boxes for their second and third, analog-only sets—Samsung expects to begin selling its boxes through online retail channels.
And while LG says it will sell its model for around $60 for the duration of the transition, Samsung plans to introduce its box at around $75 before dropping the price as the analog–cut-off date approaches.
“There will be three different price points through the life of the product,” says Rich Long, senior manager at Samsung's digital–set-top–box group.
Long imagines the price dropping by $10 in summer 2008 and another $10 that fall. “I expect we'll do 70% of our sales in the backend [of '08].”
Such well-wired consumers clearly aren't the focus of the government's DTV-awareness initiative—or the $40 coupons it will begin offering in January 2008 to offset the cost to consumers. But Samsung's pricing strategy could have unintended consequences.
Since the vouchers are good for only 90 days after issue, some clever consumers may delay applying until box prices come down.
But hold-outs beware: Once the government distributes its initial 24.75 million first-come–first-served vouchers (at a limit of two per household), an additional 12.75 million will be limited to households that rely on analog over-the-air service.