Pacific Media: HDTV Holiday Volume to Soar, But Revenues Flat
HDTV market research firm Pacific Media Associates predicts what a lot of C-business already expect: HDTVs will fly off the shelves like hotcakes this holiday season, but margin-hungry dealers won’t have much more profit to show for it.
Pacific estimates that more than 3.2 million flat-panel HDTVs will be sold to U.S consumers in the fourth quarter, more than double the units sold in the fourth quarter of 2005. It expects mass retailers like Wal-Mart and Target to offer market-rocking limited quantity offers this Friday, with many additional significant price cuts to last through year’s end. “The manufacturers and retailers have apparently chosen to increase sales volume with significantly lower retail prices, sacrificing large portions of retail and manufacturing profits in the process,” said the firm.
“If we combine all flat panel and rear projection HDTV consumer sales in the U.S.,” said Pacific Vice President Rosemary Abowd, “we project an 80 percent increase in unit sales for 2006 over 2005. We expect that pace to slow somewhat for 2007, with units growing only by 19 percent, or about 2.3 million more units than 2006.
“Everyone expects growth in unit sales, but the big story is on the revenue side,” reported Abowd. “Average street prices continue to decline steadily, in spite of the move to larger screen sizes and higher-resolution models. As a result, manufacturers are selling more units but getting less in return. We project that revenues for 2006 will be only 42 percent greater than 2005, and will be flat for 2007 even though unit sales will increase.”