THE FRONT LINE: AUGUST 23, 2007
The Dog Days Of August? Not Quite…
August is usually a slow month for consumer electronics news, but the past couple of weeks have seen some real interesting developments in digital TV, flat panel, and blue laser technologies.
It started with the announcement in mid-month that IBM had been chosen to run the NTIA’s DTV set-top receiver coupon program. Under the contract, IBM will provide consumer education services, handle coupon distribution to consumers and retail stores, process disbursements to retailers and maintain all financial records. The value of the contract is just under $120M.
Think about it. Who’d have thought we’d see “IBM” and “digital TV” in the same sentence? You might have expected an existing manufacturer/retailer like Dell or HP to administer such a program instead. Perhaps even a major retail chain, such as Best Buy or Radio Shack, would have been a logical choice.
Be that as it may, IBM will be the contractor of record going forward. Under the NTIA’s coupon program, U.S. households may request up to two $40 coupons to be used toward the purchase of eligible digital-to-analog TV converters between January 1, 2008, and March 31, 2009.
For most consumers, the most recent exposure they’ve had to the IBM brand was with its line of ThinkPad notebook computers, a business Big Blue sold off to Chinese conglomerate Lenovo a couple of years ago. The program administration is more in line with a focus on consulting services that rival Unisys has also been trying to capture.
From the “out of left field category” comes the news that upstart CE brand Vizio has captured 12.1% of the LCD TV unit business for the 2nd quarter of 2007, outselling industry giants like Sharp, Samsung, and LG along the way. Vizi-who? That’s Vizz-ee-oh, a four-year-old brand run by marketing and sales whiz William Wang, who once ran Princeton Graphics.
Not only has Vizio been #1 in LCD HDTVs, they’ve also been a strong player in plasma. And these sales have come not only in wholesale clubs like Costco and Sam’s Club, but Wal-Mart, Sears, and Circuit City, too. Their products work very well, too (read my review of the P50HDM) and are excellent values.
Interestingly, Vizio is not a manufacturer, but a contract wholesaler who has products built to spec by OEM companies in Asia. Tight supply chain management and a very lean US operation both help to keep costs way down, resulting in such deals as a 46-inch LCD HDTV for $1,700 and a 52-inch version for $2,300.
In the “greasing the palm” category, Paramount and DreamWorks dropped a bit of a bombshell this past week by announcing that they would no longer release their films in the Blu-ray format. (For 18 months, that is. And for a total of $150 million in bribes – er, that is, financial and promotional considerations. And Steven Spielberg’s films are excluded from the agreement. Residents of Wisconsin not eligible, void where prohibited, etc. etc.)
This news comes at a time when it appears that Blu-ray is making considerable headway against HD DVD. According to the latest independent market stats, Blu-ray discs are outselling HD DVD by a 2-to-1 margin, even though the lowest-priced HD DVD player (Toshiba’s $299 HD-A2) is half the price of the lowest-priced Blu-ray player (Sony’s $499 BDP-S300).
The “financial considerations” are indeed considerable, and one might wonder if Toshiba wouldn’t have been better off just hacking another $100 of the prices of their HD DVD players. I’ve long maintained that the winner of this blue laser war will be the cheapest format with the most titles, and it’s not unlikely that Sony and Samsung may push through more aggressive price cuts in time for the late 4th quarter selling season.
The fact that Disney is gearing up to release many of its all-time classic animated features in the Blu-ray format, starting next year, will make things tough for Toshiba, although the Paramount/DreamWorks deal means that summer blockbusters Shrek The Third and Transformers won’t be available to Blu-ray owners when they come out later this fall.
Last but not least comes news from Sharp of four new 64-series LCD HDTVs, all of which have much thinner bezels and take up less space than comparably sized products from their competitors. Sharp claims these sets are 25% slimmer and 20% lighter than older Aquos models.
Unlike many competitors, Sharp is actually making money manufacturing and selling LCD HDTVs these days (news in itself) and the company remains a powerful force to reckon with. Not only that, Sharp will break ground soon on a generation 10 LCD fab, which would produce motherglass sizes of 9.3 feet by 10 feet. (How’d you like to be the guy responsible for moving those sheets around?)
The 64-series LCD HDTVs are quite attractive, and at the NYC press event, appeared to have good color saturation and wide viewing angles. The LC-42D64U will sell for $2,099, the 46-inch LC-46D64U for $2,699, and the 52-inch LC-52D64U for $3,799. (Note the huge difference in price between Sharp’s 52-inch product and Vizio’s 52-inch offering.)
There’s also a 65-inch product, the LC-65D64U, which has yet to be priced. All four models have three HDMI 1.3 (yep, 1.3) inputs, 1080p resolution, Sharp’s four-wavelength color system, and a 4 ms video response time. I couldn’t verify that last claim as the demo video clips were all from 24 fps program material.
Boy, there’s no safe time to go on vacation anymore…
