THE FRONT LINE
CEDIA EXPO 2006: Trends You Need To Watch
This year’s edition of the show was full of aggressively priced, plug-and-play HDTV products, not the usual Cedia Expo fare.
I first attended Cedia Expo back in 1997, when the show was held in Atlanta and attracted about 10,000 — 12,000 attendees. In those days, it was a pretty exclusive show, loaded with high-end audio and video equipment. Everything was a custom install, and there were plenty of big bucks attached to those installs.
This year’s show felt more like InfoComm. The aisles were loaded with HDTVs with jaw-dropping low prices. In fact, there were more Cedia exhibitors than ever who sell their products through distribution or big box stores only, not through custom installers.
JVC, Sony, Panasonic, Sharp, LG, Samsung, Epson, InFocus, Toshiba, Mitsubishi, Hitachi — I could go on and on, but all had big CES-style booths full of big box store HDTVs, blue laser players, and accessories.
My fellow analysts and I fully expected this abundance of 1920x1080 projectors, rear-projection TVs, and flat panels at the show. What we didn’t expect was the aggressive pricing, such as Sharp’s 42-inch 1080p integrated LCD HDTV for $2,495 or Mitsubishi’s 1080p front LCD projector for $4,495.
By my count, there were at least half a dozen 1080p LCOS and LCD home theater projectors announced, and all had target prices well under $6,000. How about microdisplay rear projection HDTVs? Prices ranged as low as $2,800 (MSRP) for 52-inch 1080p models to $3,099 for 56-inch sets, $3,800 for 61-inch models, and $6,000 for 73-inch versions.
Over in the flat panel marketplace, 32-inch LCD panels are now available for less than $1,600, while 37-inch models are retailing for under $2,000. Even 46-inch/47-inch 1080p LCD HDTVs are dropping below $3,500, with some products hitting the $2,999 price point.
And let’s face it, 52-inch 1080p LCD HDTVs for under $5K are a serious threat to microdisplay RPTVs, not to mention plasma (which is running about neck-and-neck with MD RPTV in the 50 and 52-inch sizes). The mass distribution channels will work quickly to bring prices down even further by the middle of 2007.
Looking at the big picture, Cedia Expo isn’t really a custom design and installation show anymore. Rather, it now resembles a smaller, low-key CES, with many low-price, plug-and-play products being peddled.
Granted, there still are plenty of higher-priced display products from traditional Cedia channel companies, such as Runco/Vidikron, SIM2, projectiondesign, DreamWorks, and Fujitsu. However, not all of these companies are manufacturers, and some of them are OEMing the exact same products that retail at much lower prices in “big box” stores.
What exactly is the future of the Cedia market? Will it continue to grow, or eventually fade away? With projector and HDTV manufacturers everywhere adopting mass-market distribution models — out of necessity — it is certainly going to increase pressure on small, custom system integrators. Not only that, more and more HT customers are Web-savvy. They know full well what projectors and HDTVs are selling for these days.
And what of the push into HT design and integration by big box stores? Some time ago, Best Buy bought out the Magnolia home theater chain, and is currently in the midst of a nationwide remodeling effort to expand the Magnolia custom install section. Their success with the Geek Squad venture has now led them to go after custom home theater installs.
Circuit City has announced pretty much the same thing with their Firedog initiative — field support and installation of both PC-centric and home theater products. Obviously, both companies smell an opportunity, what with the proliferation of low-cost projectors and flat screen HDTV sets.
Another wild card is the emergence of small regional HT integration franchises, such as Theater Extreme. This company, which currently has 20 showrooms and more on the way, delivers complete theaters from $3,000 to $12,000. These modular designs take advantage of the low prices for HT projectors and displays, and combine them with other economies of scale in control circuits, audio components, and screens that only a distributor can offer.
The professional AV industry has already been impacted by so-called “hang and bang” installations, where a small projector, screen, and simple wiring to connect it all together can be put into a meeting room by almost anyone with limited mechanical and electrical skills. (Whether this is a good thing is not the issue here.)
Only time will tell whether Theater Extreme or similar concepts will succeed. But they’ve already got one crucial part of the equation solved — having enough critical mass to deal direct with display product manufacturers.
That’s a big problem for the average custom integrator these days, who is either (a) forced to tell his customer to buy their big plasma HDTV or RPTV directly from Best Buy and have it delivered for installation, or (b) put together a “power buy” from a distributor with other competing local dealers.
The interesting thing is that the management of Cedia probably could care less that their show is changing this way. They still make money off all of the expanding booth space, and still offer Cedia certification courses.
If anything, the Consumer Electronics Association should be more concerned about Cedia Expo, which offers almost as many chances to see the latest in video, audio, and display products, but without the clutter of booths featuring computers, cell phones, digital cameras; long cab lines, overpriced hotels, and aisles jammed with people!
