First evidence HDTV sales might get hit by recession fears

October 14, 2008

I mentioned last week when the Dow was plummeting that I was polishing off a piece for Forrester on what a downturn does to video entertainment in the home. That report is due out tomorrow, so I’ll bring it up then, but notice that today’s Wall Street Journal reports the first evidence that HDTV sales might be headed for a crash. Check it out at: Economic Woes Hit HDTV Sales – WSJ.com

This is interesting in light of last week’s assertion from the CEA that TVs and other A/V hardware weregoing to grow 4.7% this year despite a looming recession. If I had to bet, I’d bet on zero growth for the category.

Zero growth is not as drastic as it sounds. This is a category that’s notoriously elastic in a down or up economy, according to Current Expenditure Survey data that I’m citing in my piece later this week. However, specific subcategories and even brands can still grow. Take Vizio, which will be the low-cost substitute to which more people will turn. The Wii will sell out again (though fewer games will sell than hoped, while game rentals will go up a notch). Maybe the enormously popular Wii Fit balance board will slow down, but that’s a big maybe (have you tried it? sooooo cool). And I’ve already written about the Flip camera’s likely ability to weather the storm

So bad news it not bad news all around. The people who sell rice are thrilled right now. Rice always goes up in a down economy.

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Should Apple make a TV?

October 6, 2008

It’s a question I get asked a lot, especially by people in the press, who love all things Apple. 

The question came back up with a vengeance last week, as reporters heard of a new product from Apple called the “brick” that would be released soon. It turns out the brick may just be an innovative manufacturing process, not a product. But if I back up for a second, I want to give you a sense of the behind-the-scenes activity on something like this. Once the rumor starts, I get gentle emails from all camps in the press, ranging from bloggers to newspaper reporters, eager to sniff for anyone who has been pre-briefed on a major announcement.

Note: this just shows how little they know Apple. Apple doesn’t pre-brief. Further note for the future: if I am pre-briefed, I know how to keep a secret.

Invariably the question turns to speculation: What do you think the new product will be? What should it be? Because I’m a video guy, the conversation naturally turns to the question – should Apple make a TV?

It’s a question some people in the press apparently think Forrester has answered. I trace this to a Wall Street Journal article which tossed out casually that “Forrester throws cold water on the idea.” For the record, in our report about the future of Apple (authored by my colleague J.P. Gownder) back in May, we said these scantwords about the future of the  standalone set-top box called the Apple TV:

Apple TVs could also be integrated into an Apple HDTV product, which would leverage Apple’s competence at designing appealing, crisp, high-end LCD displays for the Macintosh. (see the May 22, 2008 report, The Future of Apple Inc.)

I think this is a very logical step — putting iTunes in the TV — for Apple to take, especially now that NBC is back in the iTunes fold. But I also think it’s a step that would not be fully exploited if Apple doesn’t adopt an ad-supported streaming model for video. Which is what I recommended every company making an over-the-top TV play do in my recent report. 

Of course, what I think doesn’t matter. What do you think? Should apple make a TV? If not, why? If so, when?


Cutting the cable cord: is it time?

October 3, 2008

Some weeks ago, Nick Wingfield at the Wall Street Journal and I had a conversation that went something like this:

Nick: So are people ready to cut the cable cord yet?

[note from me: “cutting the cord” does not refer to childbirth, sorry; it’s a play on what has happened to the phone business as so many people — nearly 10% have gone cell-phone only in the past decade]

Me: No. We don’t see it in our data, in fact, we don’t really measure it that much because the numbers are so small.

Nick: Hmmm. [silence]

This silence made me uneasy. It’s a good question and it’s one I wanted to have an answer for. I told Nick that we would probably start tackling this in earnest in early 2009 because by then it would be measurable via surveys. 

Then something funny happened. In a series of in-depth interviews I did with people who watch more than an hour of online video a week (the average is 56 minutes a week), these participants volunteered to me that they had recently abandoned cable.

The range was surprising:

– A 24-year old employee by day and student by night. He and his young wife can’t afford cable on their tight budget. By buying a few iTunes episodes each month, streaming a bunch for free on CBS.com, ABC.com, and Hulu.com, and by having a Netflix subscription (and an Xbox 360 through which Netflix streaming can occur), they get all their video needs satisfied for half the price of their prior cable bill.

– A 37-year old homemaker with three kids who has never had cable before because it was costly (and because most if it was inappropriate for her children – I need to comment on that in a later post), is now happy that she will never need cable.

And then this: Nick’s article in today’s WSJ about cable cord-cutting. I’m not surprised he found the examples he did. I found mine without hardly looking. Looks like our next survey is going to have to dive deep into this!

Exciting times ahead, eh, cable companies?