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Dealers Dreaming Of A 4K Christmas

NEW YORK — With prices falling rapidly and Ultra HD content growing steadily, CE stakeholders contacted by TWICE are forecasting a big win for 4K TV in Q4.

But even the display technology’s biggest boosters concede that dealers can’t live on 4K alone. Hence, retailers will also be decorating their holiday sales floors with wearables, wireless audio and all manner of connected home devices.

Not all the tidings are glad, however. With the exception of UHD, no one is forecasting an out-of-the-ball-park holiday hit, and Q4 could be plagued by 4K shortages and a resumption of the kind of irrational, cut-throat pricing that first got this business in trouble.

Those concerns aside, the assessments reflect an industry on the rebound and plenty of holiday cheer as we head into the back-half of 2015. Here’s what our commentators had to say:

TWICE: What’s your CE industry outlook for the second-half of 2015 in general and Q4 in particular?

Stephen Baker, industry analyst VP, The NPD Group: Back-to-school faces tough comps in PCs and a less-than-clear outlook because of the uncertainties around the release of Windows 10. Holiday looks better as holiday-focused products, like TV and audio, still seem to be trending positively.

Dave Workman, president/CEO, ProSource: Our outlook for growth in the second half is comp-store gains of anywhere from 3 percent to 5 percent, primarily driven by 4K TV, wireless audio and custom-install-related products such as networking and automation. (See story, p. 28.)

Jeff Davis, senior sales VP, D&H Distributing: We are forecasting a strong holiday. Factors contributing to this include the improvement of the macroeconomic outlook; new technologies driving higher ASPs [average selling prices]; and the Internet of Things, which is driving opportunities for an upgrade cycle in home wireless environments.

This will help consumers accommodate new streaming media, home-monitoring products and increasing Wi-Fi demands as the volume of household devices increases. Products in this vein include the new Sengled Pulse bulbs that boost Wi-Fi signals, Quirky’s Ascend garage door opener, Honeywell’s Wi-Fi programmable thermostats and many other innovative home products.

Tom Campbell, corporate director, Video & Audio Center: We’re upbeat and expect a record-breaking holiday season for the industry, driven by 4K TV. The consumer is embracing technology like never before, and Q4 sales will go beyond analysts’ projections.

TWICE: Do you foresee a big breakout hit for Holiday 2015? Short of that, what other tech products will top consumer wish lists?

Ryan Ciovacco, CE and connected solutions president, Sears Holdings: I think the holidays will be focused around 4K TV. It’s certainly gaining ground. I also anticipate strong demand for products that deliver streaming media and connected solutions.

Baker: No big breakout product, but slow and steady improvement in demand for wearables, including watches and fitness; connected home, including cameras, lightbulbs, door bells and so forth; and ongoing growth in fitness-focused headphones, 4K TV and especially demand for 65-inch TVs. Also, look for iPhones to have another tremendous holiday.

Workman: I think the product that will top the demand list for this holiday will be the Apple Watch. There will be many others, but this one will be at the top of the list in my opinion.

Davis: 4K TV will make a good showing, in addition to holiday gaming bundles that include newly released titles.

As I mentioned, the Internet of Things will be a catalyst for a refresh cycle, motivating purchases of streaming devices and wireless accessories. In addition to those, other popular IoT products will include wearables devices such as Fitbit and Striiv activity bracelets; home security items including home-automation systems and IP-based video monitoring; and home-automation devices that save on energy and utilities by providing updates on things like temperature and water consumption and regulating climate.

Campbell: No question, 4K TV. Shipments were up 14 percent last quarter while the prices keep coming down, down, down, although it’s still a statement of affluence. There’s also more and more 4K content, including Samsung’s newest UHD Video Pack, and most important, people really like the picture.

Consequently, I don’t foresee another hit product for the season because everything is integrated into the TV set. People don’t want multiple items. But that said, wearables and wireless audio have been important to us too, because you can’t live on 4K alone.

TWICE: Discounting has been relatively orderly for the past couple of Christmases. Do you expect another controlled Q4, or will there be a return to the Wild West shoot-’em-up promotions of earlier holiday seasons?

Campbell: It remains to be seen. There will certainly be some fierce competition. The manufacturers themselves have had some aggressive pricing in the past, which is adjusted for 30 days and then goes back up.

There’s also the possibility of 4K shortages because demand has been underestimated. Right now dealers are trying to buy up inventory. We’ve been preparing for a record fall and so far haven’t been disappointed.

Baker: I would challenge the assumption of orderly discounting. Last year tablets and notebooks were pretty aggressive, and the year before that it was tablets and TVs – does 32-inch for $99 ring a bell?

Expect significant pricing activity on large, 50-inch and up non-4K TV, plus notebooks, wearables and tablets again.

Workman: I don’t expect this, only because manufacturer policies have largely eliminated the “Wild West”-type of environment from taking hold.

Rob Eby, purchasing VP, D&H Distributing: Likely some combination of both will happen. It is going to be a very aggressive Black Friday, with lots of deals. All retailers will be trying to drive foot traffic. They all want a leg up, and will use this time to set the stage for the holiday spend. It will be a good time to be a consumer.