11/22/2010 11:37 AM
It wasn’t supposed to be this way, but the sale of 3-D TV sets in the United States has hit bottom as the holiday shopping season opens. There are several reasons for this, including a lack of content and consumers’ general aversion to the required (and expensive) active-shutter glasses.
The four largest TV set manufacturers are bracing for a dismal Christmas holiday selling period. Business is down as much as 25 percent this year for all of them, especially 3-D set sales.
Sony, Panasonic, Samsung Electronics and LG Electronics have all made dire predictions for the season. With the U.S. unemployment rate high and consumers remaining reluctant to spend, manufacturers are hoping for greater demand in corporate purchases. It had been hoped that more expensive 3-D sets and brighter LED screen TV would keep prices from being cut, but U.S. consumers apparently aren’t biting.
This news comes as industry-expert predictions for roughly 1 million sets sold in the United States this year fall short, with some estimates putting the number at less than 500,000 — and that’s taking into account all of the companies with products on the market.
Tom Galanis, operations vice president for Sixth Avenue Electronics, a major retail chain in the New York area, summed up what many are thinking at a recent industry conference, "As an industry we could have done a better job launching it. We should have had standardized glasses, and we should have presented it to the consumer as a feature of a higher-quality television.”
Sony, manufacturer of the Brava TV line, has predicted a loss this year and is anticipating steep competition, Marau Kato, the company’s CFO, said. The company’s 3-D TVs, Kato said, are lagging behind Sony’s earlier expectations that they would bring in 10 percent of the annual 25 million TV sets goal.
Panasonic, maker of plasma TVs, including Viera, has not raised its total yearly profit forecast. Panasonic said it attributed the decision to more expensive raw materials, falling prices and the stronger yen.
Samsung and LG have also expressed similar concerns. While Samsung saw a record high in the period ending Sept. 30, the South Korean company has forecast its earnings will drop, and that it is expecting intense competition in the TV market in the fourth quarter.
LG’s fourth-quarter TV set prices may decline as much as 8 percent from the previous period, citing a move by TV makers to clear inventory, CFO David Jung told Bloomberg News.
Television prices are typically reduced to between 20 to 25 percent annually, Atul Goyal, a senior research analyst at CLSA Asia-Pacific Markets in Singapore, told Bloomberg News. “Consumers are saying, ‘I like the product, but I don’t want to pay a 30 percent premium to the other one. I’ll wait.’ Prices will have to come down. That’s a given.”
Analysts say this is leading to price wars during the Christmas season as retailers adopt a sell-earlier-and-for-less strategy. Seeking to move merchandise, retailers, including Target and Wal-Mart, are already lowering prices on items to entice shoppers.