A Looming HDTV Slump?


The tea leaves are mixed on this one.

In a research note yesterday, Sanford Bernstein analyst Craig Moffett posited that HDTV set sales could be heading for an ominous drop-off in the fourth quarter. The Wall Street Journal ran a story today summarizing Moffett’s analysis.

Moffett pointed to Best Buy’s 10Q filing on Oct. 9 disclosing that same-store sales for September declined 2% — after citing flat-panel TV sales for third quarter growth. In addition, he pointed to MasterCard research based on credit-card purchases showing that spending on electronics fell 14% year-over-year in September.

An HDTV sales slowdown, he suggested, would be bad news for the satellite guys — DirecTV in particular — which have heavily pushed their high-def offerings. Cable operators, on the other hand, might benefit from reduced churn because of a lower number of "switching occasions," he said.

Meanwhile, the Consumer Electronics Association last Tuesday predicted an upswing in A/V product sales of 4.7% for the 2008 holiday season vs. last year, a category that includes flat-panel HDTV displays. The CEA’s forecasts are based on input from its member manufacturers. (See CEA: Glimmer in the Gloom?)

Other contradictory indicators: CEA economist Shawn DuBravac was encouraged that there hasn’t been "a rush to consumer credit" yet, while Moffett said tighter credit may make it "impossible for many consumers to purchase an HDTV — no matter how much they want one."

I checked with iSuppli, a research firm that tracks TV sales, to get its latest forecast. For now, the firm is predicting a 6.7% dip in North American shipments for all televisions in the fourth quarter — 10.4 million units in Q4 2008, down from 11.2 million last year.

Still: That’s more than 10 million new digital TV sets (you can’t buy a new analog set anymore, and most TVs now are HD capable). Many of those buyers will be looking to hook those up to cable, satellite or telco TV services. 

We’re in "The New Age of Frugality," according to BusinessWeek, which says our "charge-it culture is getting an overdue reality check."

Sure, forget about using home-equity loans to foot the bill for European cruises. But as the psychodrama in global financial markets continues to play out, people may take a deep breath and decide to take an HDTV stay-cation instead.