Blog Post

Bad Economy Hitting HDTV Sales?

People must be watching a lot of Suze Orman these days, as sales of consumer electronics are slumping, which could be impacting the adoption of HDTVs. In these tough economic times, you can almost hear the financial guru saying in her clipped, iambic cadence “You canNOT afFORD this TELevision!”

Sanford C. Bernstein & Co. analyst Craig Moffett tells the The Wall Street Journal that amidst economic turmoil, sales of HDTVs seems to be suffering. While there are no specific stats for HDTVs, Moffett points out overall sales in electronics were down 14 percent year-over-year in September. Best Buy revealed a 2 percent drop in same-store sales in September, after it had been predicting 4 percent growth during that period.

That Best Buy was anticipating a stronger September is no surprise. At the beginning of that month (prior to the big meltdown), TV companies like LG and Toshiba told TWICE magazine that sales at that time were good and they anticipated a strong fourth quarter for HDTVs. The consumer electronics companies predicted that consumers would opt for new electronics over vacations as the year closed out.

The implications of a potential drop in HDTV sales go beyond just TV retailers and manufacturers. As the Journal reports, a dip in sales could slow the adoption of HDTV services from the likes of DirecTV and Verizon FiOS. Additionally, adoption of the high-definition Blu-ray disc format was already facing an uphill battle; no new HDTVs means no need for that either.

One potential saving grace for HDTV sales could be the upcoming digital TV switch on Feb. 17, 2009. At that time the government will shut off all analog transitions and people will need to either have a digital TV or purchase a converter box to watch over-the-air broadcasts.

6 Responses to “Bad Economy Hitting HDTV Sales?”

  1. Interesting article, Chris. There’s no doubt that the economy is having an impact on consumer products sales in general. However, it will be interesting to see what happens in the current confluence of events: people staying home and “nesting” (as they did after 9/11); the digital transition; the continuing push to DVD releases — the net result is that HDTV sales could continue to be pretty robust. At 3ality Digital, we’re obviously hoping for that, and we totally expect to see the debut of 3D-enabled HDTV’s from multiple manufacturers at CES in February, as well.

  2. Yah, I think the DTV transition should keep HDTV sales moving along. Though perhaps at a slower pace. The government isn’t doing the shut off though, they’ve mandated that broadcasters stop broadcasting over-the-air on those frequencies by that date. Given the early NC experiment, I assume outreach will pick up closer to the holidays through Feb which will confuse cable subscribers into buying new TVs they don’t need. ;)