AP
High-End TVs Excel Pre- and Post-Holiday
Wednesday January 10, 3:04 pm ET
By Barbara Ortutay, AP Business Writer
High-End TVs Give Electronics Cos. a Boost Expected to Continue Into 2007
NEW YORK (AP) -- With huge price cuts making flat panel TVs top sellers during the holidays, 2006 was the "year of the LCD TV," according to NPD Group, a market research company.
Consumer electronics from MP3 players to notebook computers and plasma TVs sold well in the weeks between Thanksgiving and Dec. 23, and last-minute shoppers before Christmas gave retailers a record week, according to data from the research firm NPD Group Inc. With deep discounts and heavy promotions, high-end TVs sold well at Best Buy Co. and Circuit City Stores Inc., the nation's biggest electronics retailers, both of which reported strong December sales.
And manufacturers, notably some lesser-known ones, are reaping the rewards.
Syntax-Brillian Corp., which makes high-definition TV sets, said earlier this week it expects sales of its fiscal second quarter, which ended Dec. 31, to have run well above Wall Street's expectations. The company, which recently began shipping its TVs to Circuit City, saw 17,000 sets sell out at the retailer on Black Friday, according to CIBC analyst Daniel Gelbtuch.
The company is also set to begin shipping to Target stores, and its Olevia brand of LCD, or liquid-crystal display, high-definition sets are already featured items on the discount retailer's Web site as best-selling high-definition sets -- above well-known brands such as Panasonic, Samsung and Toshiba.
Robert W. Baird analyst Tristan Gerra said in a note to clients he expects Syntax Brillian's revenue momentum to continue into 2007. The company stands to benefit from its advertising deal with ESPN for its Olevia TVs, especially ahead of the Super Bowl on Feb. 4.
While retailers offered heavy promotions and discounts around Christmas, prices of high-end televisions have increased since Jan. 1, said Gelbtuch, who rates Syntax-Brillian "Outperform."
Analysts expect prices to again fall ahead of the Super Bowl, when TV sets are heavily promoted to sports fans looking to spend the big day in front of a big screen. The audience of ESPN's SportCenter is a key demographic when it comes to high-end television sets, and they will be the ones buying TV sets ahead of the Super Bowl, Gelbtuch said.
The analyst also expects Trident Microsystems Inc., which makes digital television chips, to benefit from strong high-end TV sales. The Sunnyvale, Calif.-based company supplies chips to Sony Corp., Samsung, Sharp Corp. and other big electronics makers.
LCD TVs led consumer electronics retail sales during the holidays, followed by digital cameras, notebook computers and MP3 players. A total of $924 million of LCD TVs were sold -- more than twice as much as in 2005 -- at an average price of $689, according to the NPD Group. But consumers bought the TVs at heavy discounts; in 2005, the average selling price of LCD TVs sold during the holidays was $738.
LCD TVs drove Sony's sales during the holiday season, said Merrill Lynch analyst Hitoshi Kuriyama in a note to clients after a meeting with the company during the International Consumer Electronics Show in Las Vegas. He rates the company "Sell"; Sony has struggled with a variety of problems in recent months, including defective batteries in laptop computers and a shortage of its PlayStation 3 video game console.
Sony's management, the analyst wrote, expressed confidence in achieving targets for the just-ended quarter, driven by double-digit sales growth in the U.S. market, particularly for LCD TVs.
Digital still and video cameras, home audio equipment and other product sales were also healthy, the analyst added.
"We think chances of the television business delivering a profit for the full year have increased with higher sales volume supported by market share gains, weak-yen benefits, and sustained premium pricing," Kuriyama wrote. |
