In a bullish state-of-the-industry address, Toshiba marketing VP Steve Nickerson predicted the consumer electronics industry will sell more than 3 million DVD players in 1999 – a figure that surpasses CEMA’s original forecasts from last fall by more than 1 million units.
Nickerson based his estimate on results from the first 15 weeks, when DVD shipments to dealers of 477,000 units were up 300% over the same period last year. At that pace, he said, player sales should move 3.3 million players. Offering an alternate forecast, he said the industry will sell 2.9 million players if the growth rate dips to 250%. Industry sales of DVD players in 1998 averaged 200% growth over 1997. Nickerson thinks the final figure for 1999 will land somewhere between 3 million and 3.3 million players.
To explain the surprising growth estimate, he said CEMA’s original forecast was based on information gathered before last year’s strong Christmas sales. Nickerson also cited the following as key contributing factors:
• The arrival of promotions in May and June offering five free discs with the purchase of Panasonic, Philips, Sony and Toshiba players.
• The availability of new DVD models that enhance the CD-audio playback capabilities of the format.
• The imminent arrival of the first players priced under $200 from some second and third-tier brands (not Toshiba).
• And widespread support of the format from video rental stores and the planned availability of such blockbusters as Titanic in the DVD format.
Virtually all manufacturers have stepped up production to meet demand, he said, and tight inventory conditions – which are currently running at four weeks – should be relieved by July 4.
Similarly, Nickerson had optimistic forecasts for 1999 HDTV sales, and he predicted HDTV and HDTV-ready sets selling more than the 120,000-unit forecast issued by CEMA. The pricing roadblock will be a less significant issue this fall, he noted, as entry prices for HDTV-ready products begin to hit the $3,000 mark. Nickerson said Toshiba will introduce later this month a 40W” HDTV-ready rear-projection set that will sell in the $3,000 price range.