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Report: Ample Converters In Pipeline

1/16/2009 04:37:00 PM Eastern

Dallas, Texas — Approximately 33.5 million digital-to-analog TV converter boxes have been shipped into the U.S. marketplace, and some 9 million boxes remain available for those who have waited until the last minute to prepare for the scheduled analog-TV cutoff next month, according to a new study from Digital Tech Consulting.

The research firm said converter box sales have grown exponentially since the products first appeared on the market a year ago in time for the government-funded $40 discount coupon program.

Consumers who receive broadcasts via over the air analog signals will need to add a converter box, a new digital TV or a multichannel TV service in order to continue viewing TV programming when broadcasters turn off their terrestrial analog TV signals (currently scheduled for Feb. 17, barring a delay).

Digital Tech Consulting said it gathered its findings from government data, interviews with converter-box manufacturers and component suppliers, and discussions with major retailers.

“While the Congress works out the last-minute issues surrounding the waiting list for government coupons, the NTIA program has resulted in sales of nearly 20 million coupon-eligible converter boxes,” stated Myra Moore, Digital Tech Consulting principal. “And our research shows that as many as 4 million additional boxes have been sold to consumers without coupons … We believe there is ample supply of nearly nine million boxes in retail warehouses and store shelves ready for an onslaught of last-minute buyers.”

The firm said sales of converter boxes started off modestly at 1.3 million units in the first quarter of last year, and grew 49 percent in the second quarter, 64 percent in the third quarter, and nearly 100 percent in the crucial fourth-quarter selling period.

During the last three months of 2008, nearly 15 million converter boxes were shipped into distribution channels as broadcasters, consumer electronics interest groups and others ramped up myriad public education programs, Digital Tech said.

DTC’s top market share leaders by brand include RCA, Magnavox, Insignia and Zenith.

“If anything, the market for digital-to-analog converter boxes has been even stronger than our original forecast of 30 million units — which some considered too generous. Of course, the cost-relieving coupon program as well as some consumers buying boxes without coupons has helped to boost sales. ” Moore noted.

Moore said that even with the ample supply, DTC expects retailers and manufacturers to carefully manage demand planning to insure that there isn’t a glut of converter boxes left after the majority of consumers have purchased the boxes they need.

“While it is expected that converters will be available throughout 2009, most demand will fall off precipitously after next month’s analog switch-off,” DTV said.