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PMA: HDTV is This Holiday’s Hot Ticket

The research firm predicts HDTV unit sales will topple 2005 figures, while 2007 sales will reach a plateau.

Menlo Park, CA–Expert research firm Pacific Media Associates estimates that more than 3.2 million flat-panel HDTVs will be sold to U.S. consumers in the fourth quarter of 2006, which is more than twice the number sold in the fourth quarter of 2005.

The HDTV price wars for this holiday season are great news for consumers, as the low prices will make it possible for many consumers to choose to upgrade to an HDTV, and often purchase an even larger model than they might have originally intended. With Wal-Mart and Target already throwing down the gauntlet by offering very low prices on products from major brands, early indications show that many other retailers will be providing attractive HDTV deals this season. In addition to breathtaking limited quantity offers on Black Friday, some price cuts will last through the end of the year. The manufacturers and retailers have apparently chosen to increase sales volume with significantly lower retail prices, sacrificing large portions of retail and manufacturing profits in the process.

“If we combine all flat panel and rear projection HDTV consumer sales in the U.S.,” said Rosemary Abowd, vice president, Pacific Media Associates, “we project an 80-percent increase in unit sales for 2006 over 2005. We expect that pace to slow somewhat for 2007, with units growing only by 19 percent, or about 2.3 million more units than 2006.”

“Everyone expects growth in unit sales, but the big story is on the revenue side,” continued Abowd. “Average street prices continue to decline steadily, in spite of the move to larger screen sizes and higher resolution models. As a result, manufacturers are selling more units but getting less in return. We project that revenues for 2006 will be only 42-percent greater than 2005, and will be flat for 2007 even though unit sales will increase.”

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