[opendtv] News: Meet your new TV
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: OpenDTV Mail List <opendtv@xxxxxxxxxxxxx>
- Date: Wed, 26 Jan 2005 09:16:14 -0500
http://www.kentucky.com/mld/kentucky/business/technology/10719139.htm
Posted on Mon, Jan. 24, 2005
Meet your new TV
By Therese Poletti
Mercury News
At a Good Guys store in San Francisco, walls of sleek, flat-panel
digital televisions line the shelves, confounding shoppers with a
dizzying array of technologies, sizes and prices.
"I'm really lost,'' said a shopper who identified herself as
Elizabeth. She said she had been looking to buy a new TV for three
days. "It's very hard to make a decision. The pictures look about the
same.''
Befuddled buyers often end up purchasing the cheapest brand they know
as they try not to drown in a sea of information on plasma, liquid
crystal display and rear and front projection -- all amid the sensory
overload of the ``in-store experience.''
Now adding to the bewildering range of choices facing consumers are a
slew of digital TVs made by computer companies. The recent entry of
TVs from PC makers like Dell and Hewlett-Packard may cause more
confusion, but consumers are expected to ultimately benefit from
lower prices brought by increased competition.
With the market for personal computers saturated and growing slowly,
digital TVs, which use much of the same technology as flat-screen
computer monitors, offer a new growth area for companies like HP.
"Consumers want to have their entertainment, which is now digital, in
every possible form throughout the home,'' said Jan-Luc Blakborn,
manager of HP Digital Entertainment Integration.
Until now, PC makers' quest for the living room was in the form of
so-called Media Center PCs. The devices run Microsoft Windows
software and let consumers watch and record TV programs, play movies
on demand, record music or browse the Web from a computer. But these
"hubs'' have not taken off as PC makers hoped, in part because the
software is too expensive and hard to use.
"Most people don't want to use the PC to watch TV,'' said Mike
George, vice president and general manager of consumer electronics at
Dell in Round Rock, Texas. ``They aren't ready for that.''
Dell offers a scaled-down version of the Media Center software for
managing photos, music and video on the PC for $39, without the TV
tuner software that turns the PC into a TV.
At the Consumer Electronics Show last month, HP also acknowledged the
need for easier to use devices, by announcing plans for a new, simple
media hub designed around the Linux operating system.
Now, by selling TVs that can double as computer monitors, PC makers
can market to a wider group of consumers who are just looking for a
new, flat-screen TV. Digital televisions also are another way for
computer companies to get their brands into the living room.
In August, HP made its first foray into televisions, launching two
plasma TVs and two LCD TVs, starting at $2,499 for a 26-inch LCD TV.
Its digital TVs are similar to offerings by big consumer electronics
companies like Sony, Sharp, Philips and Matsushita. They are also
Windows-compatible, so they can hook up to a PC and act as a big
computer monitor.
But HP's televisions are not yet available at big retailers like Best
Buy or Circuit City. The Palo Alto company is taking a slow roll-out
approach, called "launch and learn.'' HP is starting out in smaller,
regional retailers, like Good Guys, Tweeter and PC Richards, as it
seeks to make a name for itself in TVs.
The competition, though, is fierce in the crowded worldwide TV
market, which reported sales of $65.3 billion in 2003.
Many consumers don't yet realize that HP and Dell are selling
flat-screen TVs, according to analysts. They said it is still very
much the early days and they don't even know how many TV sets have
been sold by PC makers.
"They have a big history to compete with,'' said Phillip Swann,
president of TV Predictions in Arlington, Va. "The TV makers have
long-established relationships with retailers. In some cases, stores
will get better financial deals with certain TV makers so they will
try to promote one brand over the other.
"Like the TV makers, the PC makers have to get in there and roll up
their sleeves and try to get a good position in the retail stores,''
he added. "If they can prove sales, the Best Buys and everyone else
will say, 'OK.' ''
During CES in Las Vegas this month, Canton, Mass.-based Tweeter Home
Entertainment Group showed off a new prototype store that helps
customers create a digital home system networked to other rooms in
the house.
Customers are greeted by a concierge desk and salespeople offer more
service than the big retail stores. Tweeter hopes to use its
expertise in the converging area of tech and home electronics, to get
more revenues from services, such as installation and setup. Both
HP's Media Center PCs and its digital televisions are on display in
the store.
Dell, which is famous for its low-cost direct sales model, isn't
planning on changing its current way of selling products just because
it started selling TVs in the fall.
But the company realizes that most consumers need to see a TV in
person before they will buy one online or on the telephone. That's
how Dell sells its PCs, keeping costs down. The world's largest PC
maker now has 72 kiosks in malls and shopping centers throughout the
United States, where it shows a few of its many models of its LCD and
plasma TVs, along with its laptops and PCs. Dell hopes to make a
splash with what it says are much lower prices.
"I could be one of 100 makers selling big-screen TVs through consumer
electronics stores,'' said Dell's George. "They charge a 40 percent
markup on those TVs.''
For example, Dell sells a 42-inch, high-definition plasma TV for
$3,499, which it claims is comparable with a 42-inch plasma from Sony
that sells for nearly $7,000.
"Many consumers might say I won't buy it sight unseen. But they will
learn just like PCs, they can look at the specs in the consumer
electronics store and then buy from us,'' George said. "It's a very
disruptive price.''
A spokeswoman for Sony declined to comment on competitors.
Dell and recent price cuts by other TV makers may already be having
an impact on the market, which is good for consumers. Just last week,
Sony cut its profit forecast for 2005, citing, in part, a 20 percent
to 30 percent slide in the prices of flat-panel TVs.
Another PC maker, Gateway, pioneered the way into the TV market in
2000. But as part of a major restructuring, the Irvine PC maker
closed all of its Gateway stores last year, a prime retail venue for
what analysts said was a successful venture into TVs. The company
continues to sell televisions online and is now returning to retail
stores.
Kenny Cheung, a software engineer at NASA Ames in Mountain View,
isn't quite ready to buy a flat-panel TV, but he said he wouldn't
mind buying one online from Dell, if he could see the quality first.
Cheung, who was looking at laptops and flat screens at the Dell kiosk
at Westfield Shoppingtown Valley Fair, said he plans to do a lot of
research before buying a digital TV.
"It depends on the quality,'' Cheung said. "I don't want to go for
the cheapest one on the market. . . . If the reviews and things were
good, it doesn't bother me to get a Dell, vs. a Sony.''
HP and Dell said they are pleased with their efforts so far, even
though they will not disclose sales numbers.
HP even plans to roll out 17 more models this year, including
rear-projection high-definition TVs and projectors. One way HP hopes
to distinguish itself is through its own technologies. For instance,
the company plans to introduce a technology created at HP Labs, which
it calls "wobulation,'' to provide a screen resolution two times
higher than other TVs in the same price range.
"We think we can absolutely play in this space,'' said HP's Blakborn.
Contact Therese Poletti at tpoletti@xxxxxxxxxxxxxxx or at (415) 477-2510.
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