Manufacturers of 3-D TVs are getting a lump of coal this holiday season. High expectations for frothy sales have failed to materialize, and price cuts of more than 40% continue during this critical selling period.
Such lackluster sales have been a huge disappointment for the industry, which rolled out a plethora of 3-D sets at the Consumer Electronics Show earlier this year, after offering a sneak peak of the technology in 2009. Research firm DisplaySearch, in October, lowered its 3-D TV shipment projections to 1.6 million in North America for this year from its previous summer forecast of over 2 million.
And prices for the new technology remained compressed even as the sets first appeared in stores en masse, which doesn't bode well. Typically, manufacturers hope to capture their fattest profits right after a new product is introduced.
Funky Glasses and Missing Content
As a Wall Street Journal report notes, 3-D TVs initially were able to bring in a price point that was roughly several hundred dollars more than even high-end 2-D high-def TVs but now are beginning to see that premium shrink.
The souped-up sets have struggled to attract buyers, given their price, the shortage of 3-D content to go with them -- and the need to wear funky 3-D glasses. While manufacturers like Toshiba (TOSBF) are working to address the glasses issue and other makers are slashing prices, the scarcity of 3-D content to justify the purchase lingers.
DisplaySearch, however, remains bullish. The research firm estimates shipments will grow to over 90 million in 2014, making it a mainstream device by then, when it expects 3-D to account for 41% of all flat-panel shipments.
"Still Very Nascent"
When the 2011 CES rolls around on Jan. 6, 3-D technology is likely to be one of the top two trends in the new year.
"3D is still a very nascent home-entertainment technology, so 2011 will again represent an important catalyst in the evolution of 3D," writes Shawn Dubravac, chief economist and research director for the Consumer Electronics Association, in a blog post. "Expect to see more 3D than ever before. We'll start with bigger, more feature-rich 3D TVs -- a given. But 3D will expand wider than it did last year."
This year, Dubrava writes, 3-D technology at CES 2011 is expected to run the gamut of 3-D eyewear, 3-D without eyewear, 3-D in handheld mobile devices and 3-D technology in digital signage. Still, the key question remains: Will consumers be more willing buyers?