No one’s buying houses (or townhomes, or condos, or coops) anymore, and there’s general belt-tightening all-around. But that doesn’t mean folks have put their credit cards away altogether. At least not when it comes to the essentials. WSJ:
Texas-based research firm DisplaySearch said overall television shipments world-wide rose 11% in the second quarter ended June 30 from a year earlier, helped by particularly strong growth in North America, where shipments jumped 28%.
Though television sales have so far been unaffected by the economic slowdown in the U.S. and Europe, analysts and investors have been concerned that televisions would eventually see slowing demand.
South Korean electronics maker Samsung Electronics Co. took top market share of 22.8% in terms of revenue, as revenues rose 18% from the first quarter. Japan’s Sony Corp. came in second with a 12.5% share, as revenues declined slightly. Both companies showed a roughly 50% jump in revenue from a year ago.
What’s going on here? Multiple things:
- More and more low-end screens are coming on to the market. The first page of the TV section on Best Buy’s (BBY) Web site offers a 32-inch HD LCD from someone called Dynex for $499.
- The high end is coming down, too. A little more than a year ago, a 71-inch plasma from LG was going for $15,000 (down from $70,000 in 2006). Now, notes HD-promoter Mark Cuban, you can get a 73-inch Mitsubishi for $2,200 $2,100, (Thanks Mark!).
- All of this is lot easier to finance than a new home (at least for now — if the credit crisis makes its way to personal debt, look out).
This still isn’t automatically good news for consumer electronics companies, though. Margin on TV sets can be brutal. Just ask Sony’s (SNE) Howard Stringer, as Walt Mossberg did at the D6 conference earlier this year:
But TVs are doing well, right? Yeah, but we’re not making any money: “If we have any more success we’ll be bankrupt”. Why can’t you make money? It’s a commoditzed business. Lots of overhead from old biz we’ve exited, and race for market share puts pressure on prices.
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