Next year could be a very bad time for television. And I'm not talking about the people who make Heroes or CSI. No, I'm referring to the manufacturers.
No doubt the various TV makers have been eagerly awaiting the transition from analog to digital broadcasting, due to happen on Feb. 18, 2009, which many were hoping would boost sales. I don't think it will, for a couple of reasons: 1) The rollout to HDTV has been so drawn out over the past few years that the February 2009 switchover probably won't be much of a big deal. And 2) The current financial crisis.
How does this affect you and the TV you were planning on getting this Christmas? More after the Continue jump.
The Inevitable Slowdown
The Pioneers and the Sonys and the Panasonics, who have probably been expecting a spike in sales in the months leading up to the transition, could be faced products piling up on store shelves instead. As the economy worsens, many consumers who haven't already bought an HDTV are likely to think twice about laying out the cash this coming holiday season. And anyone who already has one has all the more reason to put off getting another.
A TV sales slowdown has always been inevitable; at some point most consumers will have made the leap to digital TV, and sales would flatten out accordingly. Yet year after year manufacturers roll out new products, telling us why they're so improved over the last. However, the hype machine can only drive sales for so long, and as prices fall — as they always do in electronics — from fantasy levels to dream levels and finally to reality levels, consumers got with the program and made their dreams come true. But those dreams were interrupted this year by the loud wakeup call that on Wall Street.
Now a different reality is setting in for consumers, and belt-tightening is gripping the country. Those that have the sets will try to get as much mileage out of them as possible, and given that today's sets can last 60,000 hours or more that's a lot of TV viewing to take their minds of the fact that Rome is burning. Every holiday season for the past several has been labeled, "the year everyone buys a flat screen," but this year it looks pretty doubtful.
There is one thing that manufacturers can do to move TVs of store shelves: Drop prices.
Let's Make a Deal
What the slowdown likely means is that is that prices will fall faster than the market — and unlike the recent fluctuation the Dow has seen, TV prices likely won't go on a rollercoaster ride; once they're down, they're down. In the long term (beyond Christmas and the Super Bowl) the slowdown ultimately may mean that we could see more basic sets, which has been something missing thus far. While the manufacturers keep coming out with new and improved TVs, there are a lot of so-called upgrades that we live without.
x.v.Color is a good example. In fairness it's a great technology, but so far there's no content that can take full advantage of it. Besides, HD color is already pretty damn good, and few people will notice the improvement of x.v.Color outside of a side-by-side comparison. While sets like Panasonic's 150-inch plasma HDTV will always grab headlines, I predict we'll see more basic models that will cost less and still please.
The Good News: Even if your stock portfolio has taken a hit, chances are TVs are going to be all the more affordable come 2009. And if you can still go as high as $1,000, you might be able to get that TV of your dreams, or something very close to it. And, hey, watching HDTV might be the best way to take your mind of the shaky market.