by Andy
January 4, 2012
When analog tube televisions went the way of the dodo bird and were replaced by digital flat-screens, TV sales soared! It took a while but once broad familiarity and distribution were established and mainstream consumers replaced early adopters, the TV industry flourished. Fueling this growth were thriving global and domestic economies and a booming housing market. All these new homes needed to be furnished. Better yet, consumers had money to burn – credit card debt be damned.
To meet the demand for these new flat-screen TVs, global production levels increased and many new brands entered the market like Vizio, LG, Toshiba, Coby. Plus flat-screens came in more sizes and were much lighter than their predecessors. Meaning you can now have TVs in the bathroom, on the ceiling, in every bedroom, the garage – you name it. Even cars are equipped with flat-screen TVs for road-tripping families with young kids.
Then ‘pop’ went the housing bubble and along with it the economy. While other causes can be attributed to our stalled economy; that was the biggie. Thanks to a TV over-supply and a slowed economy, the prices of flat-screens plummeted. This was great for those of us who were late to fill our homes with these wonderful new TVs, but disastrous to the consumer electronics industry and the retailers that support them. Just ask Sears, K-Mart and Best Buy how things have gone over the last few years. Ouch.
To combat this malaise, CEA – the Consumer Electronics Association – is touting a category rebirth behind the launch of even thinner flat-screen TVs. These new marvels of technology go for upwards of $4,000, which will allow manufacturers to enjoy better margins and further category excitement.
I don’t see it. Here’s why. If one manufacturer were the perceived leader of flat-screen TVs (like Apple is to SmartPhones), then consumers might rush to the new technology. But the price-point is too high for the additional value. Plus, how noticeable is a higher resolution than 1080 dpi? Innovators and early adopters may buy these pricey new TVs, but they’ll buy anything that’s new and breakthrough. They can’t help it.
Here is where relevancy comes into play. Relevancy is not about products, but about vision and category influence. Mainstream consumers already filled their homes with flat-screens and won’t really care about an even-thinner TV. It’s too late. Our needs are met with the current spate of products. Those glutting the market with cheap flat-screens are controlling the dialogue. They’re defining the category on product attributes and low cost – not on value and vision. This does not bode well for the long-term health of the category.
The long-term success of any category is not based on product improvement, but on product innovation. Over the short-term, product improvement keeps the category alive and thriving, but today’s technology lifecycles are just too short to milk product improvements for very long. For TV manufacturers, the time has come to set a vision beyond product improvements. They need to consider the purpose TVs will play in the lives of tomorrows’ consumers and the market opportunity that represents. Then, build toward that vision in terms of communications and product.
I sold a vacation home to the COO of Vizio. They have no plant. They travel the world looking for excess manufacturing capacity. Third shift, Grave-yard shifts. By day they make microwaves, at night TVs. They ship all parts to the plant and the simple assembly begins. That’s how they keep costs low.
I sold a vacation home to the COO of Vizio. They have no plant. They travel the world looking for excess manufacturing capacity. Third shift, Grave-yard shifts. By day they make microwaves, at night TVs. They ship all parts to the plant and the simple assembly begins. That’s how they keep costs low.
Thanks Jeff. Happy New Year!
Thanks Jeff. Happy New Year!
The flat screen phenomenon was the barometer in Australia of excessive spending and governments hand-outs to stimulate the economy. Now everyone has one and I agree that flatter versions at that price won’t sell at those prices. 3DTV was a huge flop and digital radio is very slow taking off here. Is it possible that we have all had enough of this stuff?
The flat screen phenomenon was the barometer in Australia of excessive spending and governments hand-outs to stimulate the economy. Now everyone has one and I agree that flatter versions at that price won’t sell at those prices. 3DTV was a huge flop and digital radio is very slow taking off here. Is it possible that we have all had enough of this stuff?
Price is always an issue where there is an abscence of value. So bigger and more resolute – may not really create any value.
Screen producers should be conflicted – they keep trying to sell bigger screens to baby boomers when the booming market is smaller screens to our children.
Tablets and Handhelds will rule the world with content on demand.
The big screen in the family room is going to be used like a dinning room – only on the rare occasion.
I love your comment and will steal that thought — price is always an issue where there is an absence of value — often. Happy New Year!
Price is always an issue where there is an abscence of value. So bigger and more resolute – may not really create any value.
Screen producers should be conflicted – they keep trying to sell bigger screens to baby boomers when the booming market is smaller screens to our children.
Tablets and Handhelds will rule the world with content on demand.
The big screen in the family room is going to be used like a dinning room – only on the rare occasion.
I love your comment and will steal that thought — price is always an issue where there is an absence of value — often. Happy New Year!
Andy, I was one of the hold-outs to whom you refer. Just this Christmas I replaced my 13 year old 55 inch rear projection TV. It was certainly worth the wait. I purchased the cheapest of the high-end sets that included 3D capability which is phenomenal– sorry James, but having an IMAX in my living room is outstanding. My teenage kids and I watched the IMAX Whales and Dolphins movie over the holiday a couple times and marveled at the creatures popping out of the screen and into our darkened family room. John, sorry, but you cant get that same experience on any mobile device or tablet for our socially inept children who live in isolation with their stylus-like pointy fingers clicking away. Feels like many don’t have the same family values that some of us appreciate more than anything.
Now to my point about relevancy… multiple incremental improvements aggregate to a “major” difference for those, like me, who have been waiting for years for the high-end, flattest, lightest, brightest device come down in price below the cost of a down-payment on a car. The global market is big enough that there will always be a sizable group of people needing the final push to convince them to make such an investment. So to me, a series of product improvements over the past 13 years seem like a major “innovation”. I think for the global consumer market, where these guys play, that will always be the case.
While it’s great for consumers, the industry itself is in a self-admitted tailspin. At some point the milk runs dry with incremental improvements. Those like you and me who waited 13 years to buy are thrilled about this ‘new’ technology, but the category is now mature and innovation beyond incremental improvement is sorely needed.
Happy New Year.
Andy, I was one of the hold-outs to whom you refer. Just this Christmas I replaced my 13 year old 55 inch rear projection TV. It was certainly worth the wait. I purchased the cheapest of the high-end sets that included 3D capability which is phenomenal– sorry James, but having an IMAX in my living room is outstanding. My teenage kids and I watched the IMAX Whales and Dolphins movie over the holiday a couple times and marveled at the creatures popping out of the screen and into our darkened family room. John, sorry, but you cant get that same experience on any mobile device or tablet for our socially inept children who live in isolation with their stylus-like pointy fingers clicking away. Feels like many don’t have the same family values that some of us appreciate more than anything.
Now to my point about relevancy… multiple incremental improvements aggregate to a “major” difference for those, like me, who have been waiting for years for the high-end, flattest, lightest, brightest device come down in price below the cost of a down-payment on a car. The global market is big enough that there will always be a sizable group of people needing the final push to convince them to make such an investment. So to me, a series of product improvements over the past 13 years seem like a major “innovation”. I think for the global consumer market, where these guys play, that will always be the case.
While it’s great for consumers, the industry itself is in a self-admitted tailspin. At some point the milk runs dry with incremental improvements. Those like you and me who waited 13 years to buy are thrilled about this ‘new’ technology, but the category is now mature and innovation beyond incremental improvement is sorely needed.
Happy New Year.
I must confess that I don’t know how you define category or what you mean by mature? In a world of 8 Billion you think there is still a market for those who would be equally delighted as we. If so, then simply continue with incremental improvements over the next 12 years and it will seem like innovation once again to you and me when we are ready for our next investment in home entertainment. Meanwhile, there are probably a few billion people who would be amazed at the so called mature category you describe. Of course at some point you are going to have holographic porn projected into your living room… now maybe that will excite you :-$ BTW… if you want to get on an industry for lack of innovation you really ought to be on the Healthcare industry and not the home-electronics industry. I’m still handed paper and pencils when I walk into my doctors office to fill in the same forms I’ve been filling out for years. My XRays are printed on velum and handed to me to deliver to my doctor… R U serious, com’on!
I must confess that I don’t know how you define category or what you mean by mature? In a world of 8 Billion you think there is still a market for those who would be equally delighted as we. If so, then simply continue with incremental improvements over the next 12 years and it will seem like innovation once again to you and me when we are ready for our next investment in home entertainment. Meanwhile, there are probably a few billion people who would be amazed at the so called mature category you describe. Of course at some point you are going to have holographic porn projected into your living room… now maybe that will excite you :-$ BTW… if you want to get on an industry for lack of innovation you really ought to be on the Healthcare industry and not the home-electronics industry. I’m still handed paper and pencils when I walk into my doctors office to fill in the same forms I’ve been filling out for years. My XRays are printed on velum and handed to me to deliver to my doctor… R U serious, com’on!
This holds true no matter what kind of electric toothbrush the people used.
This holds true no matter what kind of electric toothbrush the people used.
I have really enjoyied reading your well written article. It looks like you spend a lot of effort and time on your blog. I have bookmarked it and I am looking forward to reading new articles. Keep up the good work!
I have really enjoyied reading your well written article. It looks like you spend a lot of effort and time on your blog. I have bookmarked it and I am looking forward to reading new articles. Keep up the good work!