Weak Economy Boosts Sales of T.V. Picture-Tubes

Weak Economy Boosts Sales of Picture-Tube TVs
By Eric A. Taub
The slowing American economy has had an unexpected effect on the television business: a resurgence in the popularity of the standard picture-tube TV.
According to new sales figures from the DisplaySearch research firm, tube TVs edged out plasma models to become the second-most-popular technology during the first quarter of this year. In the fourth quarter of 2007, it was plasma that enjoyed the number-two spot, after LCD.
The reasons are simple, according to Paul Gagnon, the company’s director of North American TV research. It all has to do with price sensitivity and the sense among consumers that they should purchase a cheap digital-capable set before the nation switches to all-digital broadcasting next year.
Enjoying the boom in picture-tube TV sales are the low-cost mass marketers like Wal-Mart. Tube sets have all but disappeared from big-box consumer electronics retailers, such as Best Buy, Circuit City and even Costco. In terms of revenue, the venerable RCA brand, owned by China’s TCL, has captured a 46 percent market share, putting it in first place.

And while picture-tube TVs may be hard to find here, that’s not the case in the rest of the world. Tube TVs still outsell LCD sets worldwide, although the two technologies are now neck and neck. In the first quarter of this year, 22.1 million tube TVs were sold worldwide, compared with 21.1 million LCD sets.
For those who still want to buy a flat-panel TV, the economy has also caused consumers to rethink their need for the biggest and best.
TV sales normally fall after the holiday buying boom, and this year was no exception. But unit sales of sets 40 inches and larger dropped by a larger-than-expected 36 percent in the first quarter of 2008 compared with the last quarter of 2007. Meanwhile, sales of sets smaller than 40 inches in size decreased only 33 percent. “With the Super Bowl in January, typically sales of larger sets do well in the first quarter,” Mr. Gagnon said. “Sales of TVs in the 30- to 37-inch size were stronger than expected.” Smaller sets mean lower revenues for the manufacturers.
On the plasma front, Panasonic remained the sales leader, even though plasma now accounts for just 6 percent of worldwide TV sales. And in the United States, Vizio, the low-cost manufacturer, has seen its plasma market share almost double from the fourth quarter of last year, from 5.7 percent to 10 percent. (Panasonic’s first-place share of the U.S. plasma business dropped from 38 to 35 percent.)
One bright spot for the industry: sales of still-pricey TVs 50 inches and larger “was stronger than expected,” Mr. Gagnon said. If the rich do not always get richer, so far at least many seem to have retained their ability to buy big TVs. http://davidsradiotv2000.blogspot.com/ 5-23-2008