3D TVs Fail To Draw Holiday Shoppers - InformationWeek

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12/15/2010
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3D TVs Fail To Draw Holiday Shoppers

Retailers report sluggish sales on televisions with the latest bells and whistles.

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With less than stellar sales in the busiest quarter of the year, retailers are finding out the hard way that consumers aren't pining for the latest features, like 3D screens and Internet connectivity, on new television sets. Sales of 3D TVs have been lagging behind industry expectations, Best Buy CEO Brian Dunn told analysts on Tuesday, Reuters reported.

"There was confusion about 3D early [on]," Dunn said, according to Reuters. "It was a little short on content."

Best Buy, the nation's largest consumer electronics chain, cut its full-year profit forecast, causing its shares to drop nearly 15% on Tuesday. Other electronics companies are also feeling the sting as TVs with the latest bells and whistles have failed to whet consumers' appetites. However, sales will likely increase next year once more 3D content becomes available and when consumers start recording their own content on camcorders with 3D capabilities, consumer electronics executives are predicting, Reuters said.

"Just like how high-definition TV started in sports and movies, as 3D evolves, it will go with sports and movies and then become more of an everyday thing," Jay Vandenbree, head of home entertainment at LG Electronics USA, said in an interview, Reuters reported.

Some observers see the disappointing sales as a case of too much too soon, and investors are questioning why retailers have already been pushing the next generation of TVs when many consumers purchased their first flat-screen sets in 2010.

"People don't understand the added benefit of 3D," noted Frank Ingarra, a co-portfolio manager of Hennessy Funds, which holds 32,000 shares of Best Buy, according to Reuters. "When you get into $2,000 TVs, you start thinking: 'At what point do I really need this, and is it going to make my viewing experience that much better?'"

Having to buy expensive 3D glasses to watch the new TVs has also been a deal-breaker, said Ross Rubin, an analyst at NPD, Reuters reported. Some viewers have also reported feeling queasy watching some 3D shows, due to the picture quality.

TVs with bigger screens, rather than expensive ones with more features, have been the focus this holiday season, Reuters said.

The discouraging news comes as no surprise to the four largest TV makers, which last month predicted dismal sales in the last quarter of the year. 3D and the ability to view images simulating depth without special glasses have been hot topics in 2010. In October, Toshiba announced plans for two glasses-free 3D televisions.

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