The Digital Revolution Ushers In A New Era In Television
The high price of digital television sets, high capital investment costs, lack of advertising support, and scant offerings from broadcasters have restrained the penetration of digital television since its rollout in November 1998. However, despite its anti-climatic beginning, digital television still represents an important and potentially lucrative market in the consumer television industry. According to Frost & Sullivan's (www.frost.com) new strategic research, ""U.S. Consumer Televisions Markets,"" revenues are projected to increase from $8.97 billion in 1998 to $9.22 billion in 1999 and are expected to grow continually throughout the forecast period (1998-2005). To capitalize on this burgeoning segment, market participants will need to devote sufficient resources to a range of strategies, including consumer education, aggressive advertising and implementing pricing discount strategies. The market for digital television will not reach its full potential until after 2010 because of the slow transition from analog to digital. The sale of analog sets should continue until the market sees full acceptance of digital technology and the price of digital televisions decline to a comparable price point. The persistence of good economic conditions in the United States has significantly impacted and increased sales in several segments of the industry, including large screen televisions and TV/VCR combination sets. ""Because of increased spending power, consumers have developed a proclivity for large screen television sets and enhanced features,"" says Frost & Sullivan analyst Donna Ann Pusey. ""The development of the home theatre market and growth in the video game and educational material markets has also positively impacted analog television sales. The price of analog color television sets has declined to the point where consumers are able to purchase multiple sets for the household including additional sets for younger household members."" Bandwidth and compatibility issues and a shortage of digital broadcasts over terrestrial cable lines have resulted in major obstacles to the penetration of digital television. As U.S. cable television penetration is estimated at over 70 percent, it is imperative that compatibility issues be resolved in order to persuade consumers to make the switch to digital. ""U.S. Consumer Televisions Markets"" analyzes the markets for analog direct-view, projection, digital and flat panel television sets and digital set-top converter boxes. Included in this study are forecasts of unit shipments and revenues, plus market and technology trends, end-user analyses, and strategic recommendations for each segment covered. Frost & Sullivan presents 1999 Market Engineering Awards to companies that have worked hard to make a positive contribution to the U.S. Consumer Television industry. The Product Innovation Award is presented to Fujitsu Ltd. The Marketing Strategy Award is given to Philips Consumer Electronics. The Competitive Strategy Award is awarded to Thomson Consumer Electronics. Companies participating within this industry include: AmPro Corporation; Faroudja Laboratories; Fujitsu General Ltd.; Funai Corporation Inc.; General Instrument; Hitachi America Ltd.; JVC Company of America; Microsoft Corporation; Mitsubishi Consumer Electronics; NEC America Inc.; Panasonic; Philips Consumer Electronics; Pioneer Electronic Corporation; Runco International; Samsung Electronics America Inc.; Scientific Atlanta Inc./Corporate; Sharp Electronics Corporation; Sony Electronics Inc.; Tele-Communications Inc.; Thomson Consumer Electronics; Toshiba America Consumer Products Inc.; Vidikron of America; Zenith Electronics Corporation. Industry associations include Consumer Electronics Manufacturers Association (CEMA). Frost & Sullivan is an international marketing consulting and training company that monitors the telecommunications industry for market trends, market measurements and strategies. This ongoing research is used to complement a series of research publications such as No. 5910-66 North American Interactive Television Service Markets and is used to support participants with customized consulting needs. U.S. Consumer Televisions Markets Report: 2740-64 Publication Date: July 1999 Price: $2,950 For more information, contact Frost & Sullivan, San Antonio, Jennifer Minx, 210 348 1015 jminx@frost.com, http://www.frost.com.