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Retrevo released its monthly CE Pulse Report today. This report summarizes noteworthy trends in consumer electronics using Retrevo's CE Price Index and CE Demand Index. So what's the highlight for the month of April? Of course HDTVs. While the month of April brought some relief to manufacturers of consumer electronics categories such as Digital Cameras, Camcorders and DVD/Blu-ray Disc Players where demand stabilized and showed signs of a rebound, HDTVs continued their downward slide in demand. So what gives? How about a 30% increase in ASPs (Average Selling Prices) from January to mid-April?

 

 

Historically, it is a norm to see the price increase during this time of the year without resulting in such a decline in demand. But this year is special, isn't? The economic meltdown brought various pieces together to create a perfect storm that impacted HDTV demand while other consumer electronics categories stabilized after a decline previously:

  1. 2008 holiday season was great for consumers looking to buy electronics. Inventory built by TV manufacturers in the first half of 2008 to satisfy an economic boom (until Sep when Bear Stearns and housing market collapsed) created excess during the holiday season that brought prices artificially down to incentivize demotivated consumers. Of course it was great for consumers, you could buy a good 42" LCD TV for under $600. But it hurt margins for manufacturers and retailers (as was evident from quarterly earning reports for Toshiba TVs, Samsung TVs, Vizio TVs and LG LCD TVs and others).
  2. After the inventory cleared in Jan, rock-bottom prices went away, consumer demand plummetted across the board (HDTVs included). Feb and Mar were brutal for pretty much the whole market. This did 2 things. Manufacturers constrained the production of LCD and Plasma TVs severly as they were expecting a nuclear winter, building up supply slowly to meet a lower anticipated demand in second half of 2009. At the same time, the prices for HDTVs kept going up with much lower production volumes and a desire among manufacturers and retailers to fetch higher profit margins in the first half of 2009. And on top of that manufacturers and retailers hunkered down on marketing / advertising. How many times did you see a Best Buy flyer recently motivating you to research a product or visit a store?
  3. As consumer sentiment improved in April, they responded positively to categories such as Digital Cameras and HD Camcorders while lack of marketing and higher ASPs for HDTVs kept them away.

 

 

No one could have predicted the future but lack of marketing and higher than normal ASP increase did hurt HDTV manufacturers and retailers at the end. They didn't get their share of consumer mindshare in April when it came to electronics purchase. The good news is that Retrevo Pulse indicates an increase in supply and stability in prices of HDTVs. What will be interesting to watch is whether ASPs for HDTVs come down in May this year as opposed to in August historically. May be holiday too will come early this year and consumers will be able to find good deals on HDTVs in summer and will not have to wait until Nov/Dec.

 

 

Keep checking Retrevo's Price Index and Demand Index to spot good times to buy popular electronics products this summer such as Magellan GPS, Wireless Routers, Bose Home Theater Systems and more. Let us know your thoughts and if you would like to share any tidbits about consumer electronics shopping. Here is a link to the press release for Retrevo's April Pulse Report.

To read the full press release Click Here.

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Buying vs waiting

I don't know how "common" my point of view is, probably not very common. I still do not buy the newest stuff until I read or listen to other's experiences first. I'm in no real hurry to be first in this area as the first folks almost invariably get burned.

This is not to say I'm far behind, I have an 8Mpx camera, not a 12, I have a large screen TV, all be it a non-digital TV & given to me not purchased by me. I own 6 computers, 1 win 2000 laptop, three XP home laptops (one of which is literally falling apart because of bad case-hinge design & which will be sold for parts on eBay soon), one XP Pro desktop, and one older PC with a Linux OS. I am also into amateur radio & own a number of different radios some of which I built myself, again none are cutting edge any longer. My sound "system" includes a new iPod Nano, along with three other mp3 players I use. One of which was bought long before the iPod, you see I had to wait till Apple got their act together and 1, made it easy for PC users, and 2. changed their iTunes program and Store from keeping you from backing up your music & moving your music to another iPod or generic mp3 player.

Enough said, you get the point no doubt. My point of view on electronics, and this includes software which is an ever bigger part of almost all hardware, is to wait till the majority of initial bugs are worked out because it seems to me that companies are putting things on the market much soon than they normally would have just 20 years ago. They use those of us willing to part with our money as the guinea pigs to shake out the bugs in their software and hardware.

Last, I'm still waiting for that 40" HDTV to come down to my price range. Then I'll probably wait till the bugs are worked out a bit more and then perhaps I'll have a friend give me their older HDTV because they want to pick up the latest 3D-HDTV & I'll comfortably sit down and watch either one of my not-3D movies or over-the-air HD TV (Comcast just increased my fees by some 72% so I'm looking at when to drop them, again) on another not-cutting-edge but free TV.

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