Washington, D.C. (December 13, 2006)
-- Sony Electronics said this week that plunging prices
for High-Definition TVs could hurt the industry. Well,
some Best Buy shareholders might agree with that
assessment today.
Best Buy, one of the nation's largest electronics
retailers, said yesterday that its fiscal third quarter
profit fell short of Wall Street estimates.
The reason: Price cuts in high-def sets.
The "big box" retailer was forced to dramatically slash
HD prices in the quarter to keep pace with Wal-Mart
which dropped large-screen sets under $1,000.
However, Best Buy CEO and vice chairman Brad Anderson
told analysts that the price cuts were a necessary evil.
"We
chose to match or beat on categories like name-brand
flat-panel TVs, and honestly, if we could do it all over
again, we'd make exactly the same decision," said
Anderson.
Best Buy shares fell nearly five percent on the third
quarter news.
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News Best Buy Cuts HDTV Prices -- And Profits The electronics retailer's third quarter profits fall short of Wall Street estimates. By Phillip Swann --------------------------------------------------------------------------
"LCDs
will continue to experience
heavy price erosion, but not at
this level," said Glasgow,
according to News.com. "It is
hard to see that business model
(of drastic price cuts)
sustaining itself."
Click
TVPredictions.com
to see today's Swanni Sez. 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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