The World Goes Flat


Flat-panel HDTV sales continue to rise but revenues aren’t because prices are going down. At least that’s what Pacific Media Associates, which samples retailers and resellers of HDTV sets, found in a new report. Their Flat-panel Display Sell-Through Tracking Service report for June shows year-over-year unit sales rose 64% but revenues have only increased 28%. That’s in part cecause the average retail price is 22% lower than it was in June 2005. Rosemary Abowd, Pacific Media vice president, discussed the trends with HD Update .

Q: Is the HD price erosion going to continue?

A: We’re already seeing it level off. The reduction in prices from 2004 to 2005 was 40% while this year it was only 22%. And while the 30-35 inch LCD panels dropped, the bigger decline was in the 42-inch LCD panels. But they aren’t going to go down too much more. It could drop about 10% more in LCD panels and only 5% in the plasma market because there are still more orders than there are plasma sets.

Q: A number of reports have said that tube TVs are going to vanish. What are you seeing?

A: CRT (cathode ray tube) monitors aren’t my area of expertise but if you look at the cost of a 15-inch CRT it’s about $79 while a 15-inch LCD can be bought for $199. That’s no longer five or six times the price—it’s only twice and it’s a little over $100 so consumers are deciding to spend the extra money for a future-proofed device.

Q: The holiday buying season is still ahead of us. What are you expecting?

A: It’s still a bit of a crapshoot because of the economic and political unrest so it’s difficult to say how that will affect the traditional consumer electronics market, especially for luxury consumer electronics. The consumer electronics industry likes to say that in the winter the mindset of a consumer is they’ll be stuck at home so why not make it more enjoyable with a home theater but buying a set is only part of the cost. They still need to get digital cable or satellite and then the HD service that can add an extra $50 or $70 [per month] to a cable bill.

Q: So what do you think will be the big story that consumer electronics reporters for TV stations will be covering?

A: The 50-inch plasma HDTV sets are making a big splash but the big story will be 1080p microdisplay rear projection TV sets, And do consumers want 1080p? Plasma displays are still going to be very pricy, over 50 inches, so there will still be interest in the rear projection units.

Q: What do you think the industry needs to do to educate the consumer more effectively? Tweeter, a retailer, thinks better educating its salepeople is the answer. Dell, Inc., the computer retailer wants consumers to “build their own” as a way to help them understand the technology better. Who is right?

A: Right now everyone is fighting generations of opinions as to what it takes to buy a TV. I do think the Tweeter approach or the Dell approach of installing it at the home helps. There is a need for the community as a whole to understand that digital is different. But the burden is on the retailers.

--Interviewed by Ken Kerschbaumer


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