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Are TV Makers Staring at The Abyss?
By Swanni

Washington, D.C. (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 horizon.

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.



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