January 5, 2011 A Bonanza in TV Sales Fades Away By SAM GROBART NY Times
http://www.nytimes.com/2011/01/06/technology/06sets.html?_r=1&pagewanted=print LAS VEGAS — By now, most Americans have taken the leap and tossed out their old boxy televisions in favor of sleek flat-panel displays. Now manufacturers want to convince those people that their once-futuristic sets are already obsolete. After a period of strong growth, sales of televisions are slowing. To counter this, TV makers are trying to persuade consumers to buy new sets by promoting new technologies. At this week’s Consumer Electronics Show, which opens Thursday, every TV maker will be crowing about things like 3-D and Internet connections — features that have not generated much excitement so far. Unit sales of liquid-crystal and plasma displays were up 2.9 percent in 2010 from the previous year, according to figures from the market researcher DisplaySearch. That is tiny compared with the gains of more than 20 percent in each of the prior three years. Those heady days of the last decade were the result of an unusual set of circumstances. The rise of flat-panel television technologies like plasma and LCD almost perfectly coincided with a government-mandated switchover to digital broadcasting and the availability of high-definition shows and movies — something these new televisions were all ready to display. That sparked a mass migration of consumers from using the old cathode-ray tube television sets to the thinner and lighter plasma and liquid-crystal displays. “Those were the golden years,” Paul Gagnon, director of North American TV research at DisplaySearch, said. “During that period, the whole pie grew. Technology inflated the size of the category.” But now, most people who want a flat-screen TV already own one. Industry watchers and manufacturers estimate that nearly two-thirds of households in the United States have a flat-screen set. “The laggards are stubborn,” Mr. Gagnon said. “They will not move as quickly as the rest of the market has.” The industry’s response has been to promote 3-D and Internet capabilities. But these were also the buzzwords at last year’s show, indicating that after a period of consistent innovation and improvement — from higher resolutions to thinner displays — the TV market is maturing and stabilizing. “In the next decade, the rate of change may not be the same,” said James Sanduski, Panasonic’s senior vice president for sales. “That said, it will still be significant.” So far, 3-D has not prompted a rush to upgrade. John Revie, senior vice president for home entertainment at Samsung, said 3-D had been saddled with a perception that it stumbled out of the gate, even though its introduction compared favorably with other technological introductions. “More than one million 3-D TVs were sold in 2010,” he said. “But LED, HD and Blu-ray each sold less than a million in their first year.” That said, Mr. Revie acknowledged the perceived shortfall. “Frankly, Samsung was hoping to drive a bigger market.” Some feel that 3-D’s appeal will remain limited. Riddhi Patel, director for television systems and retail services at iSuppli, a market researcher, said the sales pitch for 3-D was a complicated one. “Consumers are aware of the hidden costs,” Ms. Patel said. “It’s not just the display, but now you need a 3-D Blu-ray player and 3-D media and additional glasses.” She also questioned the payoff. “When everyone markets 3-D to you, they talk about ‘Avatar’ and the theatrical experience,” she said. “When you have a 42-inch TV or even a 50-inch TV, it’s not the same experience.” Internet features are now common in new TV models. But recent missteps by technology companies like Google with its Google TV service, as well as the often confusing mosaic of streaming and download providers, has left the market looking a little muddled. “Every manufacturer has their own way” of dealing with Internet video, Mr. Sanduski said. “There’s not one standard.” One way manufacturers are trying to make these features friendlier is by using Apple’s iPhone model, allowing outside companies like Netflix to develop applications that work on their displays. On Wednesday, Panasonic and LG announced new Internet TV platforms that will open up the interfaces of their sets to outside developers. One big issue for TV makers is price. From 2007 to 2010, the average price of an LCD TV dropped 36.3 percent, according to DisplaySearch. Plasma TV prices had an even more precipitous decline, dropping 51.6 percent in the same period. But those price drops have slowed recently, as manufacturers have gotten a handle on what had been an oversupply of product and have started to charge more for the new features. “It’s kind of like having the auto industry trying to raise the prices of cars by 20 percent by adding all these options to every vehicle,” Mr. Gagnon said. In another bright spot for TV makers, consumers seem willing to upgrade their sets more frequently than they did in the tube era, when it was not uncommon for them to use the same sets for a decade or more. “People held on to their TV like an appliance,” Mr. Sanduski said. Analysts and TV makers now assume a five-to-seven-year replacement cycle for televisions. For the manufacturers, that may feel like an awfully long time. But it is only slightly longer than the cycle for PCs, which are replaced every three to four years. “There’s a little bit of fatigue,” Mr. Sanduski said. “Many consumers are saying, ‘I just bought a TV. I’m going to wait.’ ” -- ======================================== George Antunes, Political Science Dept University of Houston; Houston, TX 77204 Voice: 713-743-3923 Fax: 713-743-3927 Mail: antunes at uh dot edu _______________________________________________ Medianews mailing list [email protected] http://lists.etskywarn.net/mailman/listinfo/medianews
