Forrester Predicts HD Penetration at 34 Percent

Lower price points on virtually all HD products in the just-concluded holiday selling season spelled good news for millions of CE shoppers who may have been still mulling a possible plunge into HD, but not-so-good news for manufacturers and retailers, who saw their margin of profits plunge as a result of mostly well-advertised (and a few unpublicized) sale discounts.

The holiday inclusion of mostly HD flatscreens at non-CE big box stores like Home Depot brought HD products a bit closer to eventually becoming ubiquitous in North America.

Although still faced with relatively higher prices for HD units compared to earlier analog sets, along with additional expenses for HDMI cables, surround sound and other possible accoutrements of a home entertainment setup (including professional in-home calibration for some), flatscreen units were snatched up in a "buying frenzy" since Thanksgiving, according to NPR's "Morning Edition" on Jan. 1.

A Forrester analyst said he was at a loss to explain exactly where many consumers seem to find the money for new CE products, but they manage to meet the required price points with an "infinite wallet" when they make up their minds to. Forrester is predicting penetration of HD-capable products in U.S. households has now reached 34 percent here in early 2007. That would be about double last year's estimated penetration rate.

Forrester has had to change its tune on HD over the years. Some observers may recall that back in late 1998, Forrester was predicting HD would lose out to SD (with viewers favoring quantity of channels over quality of images)--a then-jarring prediction with which CEA had immediately taken issue.

Meanwhile, Canadian consumers also were reportedly buying HD gear in record numbers in recent weeks, despite the fact that the vast majority of HD homes in Canada were not viewing bona fide HD content (see related news item in this issue).