Are TV Makers
Staring at The Abyss?
(September 11, 2012)
-- I was on an industry panel in Washington, D.C. recently
discussing the future of television when suddenly a fellow
panelist startled with me a comment.
Steve Koenig, director of industry analysis at the Consumer
Electronics Association, said OLED TV and 4K TV would
not generate significant sales
until 2015. He predicted that the price of TV's hottest new
gizmos would likely not drop sufficiently enough until then to
generate interest from the masses.
The comment startled me because for the past year or so OLED and
4K were considered the industry's saviors. OLED, which offers
eye-popping pictures with a panel thinner than sliced bread, and
4K, whose picture purports to improve on today's sets by four
times, were expected to revitalize a TV manufacturing sector
that has been suffering from flat sales for at least two years.
Although I was not the panel's moderator -- that task was being
ably handled by USA Today's Mike Snider -- I immediately took
over the session and began rapid fire questioning of Mr. Koenig.
"If OLED and 4K don't take off until 2015, what will happen to
Best Buy? Will will happen to TV makers? How will the industry
survive between now and then?"
Steve good naturedly fielded my questions, but unfortunately did
not offer any panaceas. He said the industry basically will have
to keep on keeping on until OLED and 4K break through. Steve did
express hope that Apple would launch a company-branded HDTV,
which could boost overall sales. But that hope seems to be
fading every day when you read the technology headlines. Apple
is no dummy; the company is concluding that the TV biz is harder
than it looks.
I would feel less concerned for TV makers and retailers if
Steve's assessment was not shared by many industry analysts.
Combined with a sluggish economy, the lack of affordable,
spectacular new product could keep TV sales flat for a few more
years. In this economy, consumers need a compelling reason to
shop for a new TV and there doesn't seem to be one on the
This could have a devastating impact on a company like Best Buy,
which relies heavily on TV sales but has seen its profits
evaporate over the last couple of years. Can Best Buy even stay
in business until 2015 when the good times are expected to roll?
Can struggling TV makers like Sharp stay afloat until then?
I confess I don't have any answers at this point. But I plan to
explore this topic frequently over the next several months,
particularly during the height of the Black Friday shopping
season. If TV sales disappoint during the holidays, it could
make 2013 not only a tough year for the TV manufacturing
industry, but a year that eliminates companies and perhaps
entire categories of products.