The Regional Riff
Perry: Naturally, we have been concerned over the reduction in unit price for televisions, but so far this year, our actual sales prices have been about $15 per unit less than a year ago. What this means is that our staff has done a good job of educating our customers about the advantages of larger and higher-quality televisions. Last year's 42-inch plasma customer is now able to afford a 50-inch. We're also encouraging our staff to keep up the ticket total by adding audio, accessories and warranties. In the last few months we have seen flat-screen TVs overtake micro-display rear-projection TVs in unit sales. Even though micro-display TVs fit many customers' needs, thin is in.
Yacoubian: Declining ASPs for all TVs are a core concern for us—even more than declining margins and increased competition. The reality is that we have to sell to a significantly higher number of customers to meet our forecasts. Sheer numbers are not a traditional strength of the specialty channel. That being said, the prices have made flat-panel TVs much less of a niche purchase, hence, opening the market to lots of folks who would not have considered them as recently as last year. For this reason, we're cautiously optimistic about the holiday selling season…as long as our product availability meets the demand opportunity.
Rosenberg: In some cases TV, especially plasma, has taken deep price drops. Fifty percent is probably right. But it's going to bring a lot more buyers in. Flat panel should be good for Christmas. I think you're going to find that there's a good sell-through on it. There are some worries about untimely delivery, though, and about some manufacturers' possible inability to ship product. As for holiday pricing, the industry could see 42-inch plasmas go for $1,500 on "Black Friday."