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Best Buy’s TV Turnoff

12/20/2010 12:01 AM Eastern

TVs weren’t lighting up
Best Buy’s cash registers on
Black Friday.

The nation’s biggest electronics
retailer blamed weaker-thanexpected
results for its quarter
ended Nov. 27 in part on consumer
reluctance to buy more
expensive 3DTVs and Internetconnected
sets — such as Sony’s
Google TV-based sets, listed at
$1,400 for a 42-inch model —
as well as price competition for
lower-end TVs.

Quarterly revenue from Best
Buy’s U.S. stores open at least
14 months fell 5% year-to-year
compared with the company’s
expectations of flat or modest
growth.

While Best Buy lost some
share to online retailers, TV
sales in general have been soft.

In 2010, U.S. sales of liquidcrystal
display TVs are expected
to decline for the first time,
by 1.2%, to 31.9 million units,
according to iSuppli. The research
firm attributed the dip
to lingering economic concerns
among Americans and the fact
that manufacturers didn’t mark
down LCD TVs, which account
for more than 90% of sets sold,
as they have in the past.

For Best Buy, “newer technologies
like 3D and IPTV [Internet
protocol TV] ... have been slower
to take hold,” CEO Brian Dunn
acknowledged on a conference
call with analysts.

“I think there was confusion
about 3D early,” Dunn added.
“It was a little short on content...
I think 3D will become top of
mind as an important feature
for television as we get into next
year.”

While Best Buy is “quite
pleased” with sales of advanced
TVs at the high end, he said, “it is
an adoption in the middle which
we see as a next-year sort of value
proposition for the consumers
in the middle around 3D and
IPTV.”

U.S. shipments of LCD
televisions are expected
to decline this year:

2008 24.5 million

2009 32.3 million

2010 31.9 million

2011 35.7 million

SOURCE: iSuppli, December 2010

 

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