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Technology Stocks : Brillian Corporation

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To: Starlight who wrote (226)6/13/2007 8:35:00 PM
From: Tom Caruthers   of 361
 
This is the reason for the drop. (in addition to the bad press and fine)

biz.yahoo.com

I can tell you that I visited Circuit City today before I even saw this article and went hunting for the Olevia TVs. Surprisingly, there were more TVs from Element, a division of privately held Petters Group, than there were from Brillian. There were only 2 Olevia models on the show room floor, priced at a 40% discount to Tier 1 TVs. I thought it was strange there were only 2 models.

So, why would BRLC stop shipments to Circuit City? It has been a big seller for CC. Perhaps it had to do with Best Buy as the analyst suggests. But I think Best Buy had thoughts of rolling out their own private label LCDs under their flagship name - Insignia. I have not seen an Insignia sets in the TV size to date. Best Buy may have found that Olevia has the same margin and they don't have to deal with the headache of branding and marketing their own.

If I were BRLC, I'd certainly choose Best Buy over CC if I had the chance (though as a consumer, I personally like CC better than Best Buy). If I were Best Buy, I'd certainly want exclusivity from BRLC. The comment "We are completely committed to CC for 2007" suggests they are indeed looking at a transition.

In any case, I'll probably double down here in the $4's to bring my cost to $6-ish.

Tom
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