Dealers, Distributors Foresee Flat Panel As Q4 Crux

NEW YORK — While temperatures hit the hundred mark in many parts of the country last week, CE dealers and distributors were focused on cooler climes: Holiday 2007.

Indeed, merchants are presently laying in plans for the fourth quarter to secure allotments of the hottest inventory come Christmas. And this year, like last, is proving to be a no-brainer: flat panel, flat panel and more flat panel.

"The No. 1 item again this year will be flat-panel LCD and plasma televisions as they have continued to drop in price over the past year and have migrated from the early adopters to the mainstream buyer," said Rob Kalman, U.S. marketing VP for SED International, a distributor. "That, combined with retailer financing programs, have made 40-inch and larger panels very affordable for the average consumer."

Jim Ristow, general manager of Home Entertainment Source (HES), the specialty A/V division of the Brand Source buying group, agrees that "flat screen continues to be hot as prices go down." As a result, HES is anticipating "big velocity in 50-inch and larger screens" in both LCD and plasma.

Neverthless, "32 inches will continue to be the sweet spot in LCD," he said. "With the kind of aggressive pricing that's expected, the TVs can be placed anywhere in the house."

Chip Player, CEO of Queen City Audio, Video & Appliances, is also "hanging our hat on flat panel" this Christmas. Thanks to ongoing price drops, "people are just coming in. They're no longer waiting on the fence" — which augurs well for a TV holiday bonanza.

The price moves have allowed plasma to become Queen City's lead item, Player said. In LCD, 32 and 37 inches remain the core screen sizes, with 42-inch panels gaining momentum. "The response rate is fast enough now" — and the prices are low enough — to make 42-inch LCD models a consideration for consumers, he said.

Similarly, Player expects lower prices to also help propel sales of 1080p TVs. "The delta between 720p and 1080p is not big enough anymore to deter people from buying higher resolution. They figure they may as well get the best product with the latest technology available."

Abe Yazdian, secretary, treasurer and chief merchant of fellow NATM member Electronic Express, the 15-store Tennessee independent, concurs that 1080p will be "a pretty big selling point. The technology is changing so fast that consumers want to make sure their purchases are future compatible."

Nevertheless, Yazdian hasn't seen much consumer preference for one flat-panel technology over the other. "Fifty to 60 percent just know that they want a flat panel," he said. Size, however, does matter. "Surprisingly, we're seeing a lot of demand for 40-inch and higher LCD, although we're also expanding our assortment down to smaller sizes as well."

What's more, reports of the death of microdisplay have been greatly exaggerated, at least at Electronic Express and Queen City. "The South likes the big sizes," Yazdian said, "and the fact that they're 40 percent cheaper than [equivalently sized] flat panels. We'll continue to support the category." Added Player, "DLP is still selling, especially in the 65-inch and 73-inch screen sizes."

Doug Robison, president of distributor DSI Systems, agreed. "As far as CE products are concerned, I think there is definitely room for all three television technologies [LCD, plasma and microdisplay] and we are banking on all three doing very well this year."