Commentary
Best Buy: Flat-Screen Prices Will Keep Falling
But executive says it won't hurt company's profits.
By Phillip Swann

Washington, D.C. (June 23, 2006) -- Flat-screen TV prices will keep falling this year, but it shouldn't hurt the profits of electronics retailers.

That's according to Michael Vitelli, Best Buy's senior vice president of consumer electronics, who was interviewed this week by Reuters.

Vitelli told the news service that the profit margins for flat-screen sets remains very high despite the falling prices. Some flat-screen TVs can now be purchased for less than $2,000, roughly half the price of a few years ago.

The Best Buy executive also said there has been a shortage of LCD TVs in the United States because manufacturers shipped too many to Europe in anticipation of sales driven by the World Cup.

Swanni Sez:
The CE industry is about to undergo a dramatic change in the next few years. Digital TV prices (including flat-screen) will keep falling, but demand will jump over the next three years in the U.S. as consumers prepare for the transition from digital to analog. (The U.S. will switch its TV signals from analog to digital in February 2009.)

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Phillip Swann is president and publisher of TVPredictions.com. He has been quoted in dozens of publications and broadcast outlets, including CNN, Fox News, Inside Edition, The New York Times, The Washington Post, The Chicago Tribune, The Financial Times, The Associated Press and The Hollywood Reporter. He can be reached at swann@tvpredictions.com or at 703-505-3064.

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