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Wal-Mart Rolling Out DTV

Bentonville, Ark. – Wal-Mart is going wide on DTV rolling it out to 1,500 stores nationwide.

After testing high-definition plasma and rear projection monitors in at least two Wal-Mart units in Arkansas and Florida, the world’s largest retailer is preparing to roll out an assortment of HD and HD-ready sets.

The selection will likely include six SKUs, including two HD plasma display panels (PDP) from Sanyo and four rear projection monitors from Philips and Thomson.

Wal-Mart would neither confirm nor deny the rollout, but a source familiar with the plan told TWICE that preparations for the installations are currently underway. The units will be sold in more than half of the chain’s 2,700 discount stores and supercenters.

The HD array is already in place at Wal-Mart’s Rogers, Ark., supercenter, whose reconfigured CE department may serve as a template for the launch. According to retail analyst Aram Rubinson of Banc of America Securities, who recently visited the store, the assortment includes Sanyo’s 32-inch and 42-inch PDPs, which are ticketed at $3,968 and $5,968, respectively.

Among the rear projection units, the store is carrying a 52-inch RCA model for $1,688 and three Philips SKUs: a 43-inch for $1,584, a 46-inch for $1,654, and a 50-inch for $1,772.

The store is also stocking an analog rear projection model and two direct-view digital TVs: a 32-inch Philips and a 36-inch RCA that are both retailing for $1,292.

Bob Nocera, Philips digital television marketing VP, acknowledged that Wal-Mart is carrying two of his company’s 4:3 rear projection HDTV monitors in the 43- and 50-inch screen sizes, and is ‘experimenting’ with other Philips models including some direct-view CRT DTV monitors in select locations.

Nocera said he was unaware of any service or delivery programs that Wal-Mart was offering to support the line at this time, adding that at least initially DTV sets were sold on ‘a cash and carry’ basis, ‘but in time that may change. I am unaware of their exact plans on delivery.’

‘They seem to be taking HDTV seriously and are rolling out a high-definition signal to display models in a lot of their stores,’ he continued. ‘If you look at where the market is going, particularly in projection TV, analog has a limited lifetime. In a couple of years, basically all projection TV is going to be at least digital ready.’

Nocera said Wal-Mart’s pricing structure has been ‘competitive with everyone else,’ and not unusually low.

Wal-Mart is testing some widescreen displays (including the Sanyo PDPs) in select stores, he added, but the Philips program thus far has been limited to models with conventional 4:3 screen sizes.

‘Right now, as there is still a little gap in 4:3 and widescreen pricing — especially in picture tube products, the 4:3 models have a little more of a mass appeal,’ Nocera said. ‘But especially in projection TV, I can see that changing in the next couple of years.’

Rubinson said the CE department in the Rogers, Ark. store is about 40 percent larger than that of a typical Wal-Mart supercenter, lending it a ‘more open and accessible’ look.

Besides accommodating the new HD monitors, the additional square footage also provides for an expanded selection of video game hardware and software, notebook computers – including Sony’s Vaio – and about 60 different TV SKUs in total, he observed.

Wal-Mart’s move into high-end TV follows Sears’ rollout of plasma and LCD panels to more than 650 stores last month. While Wal-Mart’s initial test store retails are in line with average street prices, industry observers are concerned that its entry into the high-margin category could ultimately prove disruptive.

‘It’s not the healthiest thing for our guys,’ said Bill Trawick, president and executive director of the NATM Buying Corp.

Still, Trawick took solace in the complexities of selling, shipping and installing HDTV, which are more readily managed by CE dealers than discount chains, he said.

‘It’s not a cash and carry item,’ Trawick noted. ‘It’s not like buying a 13-inch TV. It’s a category that requires salesmanship. I think Wal-Mart will have some issues selling that product.’

Reported by Greg Tarr, Steve Smith and Alan Wolf