Posted on 12/28/2002 1:23:42 PM PST by Ernest_at_the_Beach
Plasma TV boosts Gateway picture
Low-price strategy, booming sales make some analysts enthusiastic
By Bruce V. Bigelow
STAFF WRITER
December 28, 2002
When Richard Doherty learned that Gateway, the build-to-order computer maker, was introducing a 42-inch plasma television for the holidays, he thought, "Oh, that'll be a good adjunct to their stores."
When he found out the Poway company would sell the giant flat-panel display for $3,000, Doherty thought, "Oh my God. They're going to change everything."
Though precise sales numbers on the plasma TV haven't been released, it's apparent that the computer maker has scored a coup – at least with analysts like Doherty.
Perhaps more importantly, Gateway might now have a product with the potential for sales growth not seen since the mid-1990s, when runaway personal computer sales drove double-digit revenue growth for the company.
As new government standards for broadcasting digital TV signals go into effect in coming years, some analysts predict the demand for plasma TVs could grow by 70 percent a year through 2008.
"We are constantly looking at the type of new product categories that made us so successful in the PC business," said Gateway's Gui Kahl, a digital solutions manager who guided the plasma TV launch.
In terms of current sales, Kahl and other Gateway officials will say only that holiday sales of the new TV have been running "significantly ahead" of their own internal forecast, whatever that may be.
Yet market researchers like Doherty, who works for the Envisioneering Group of Seaford, N.Y., say they're impressed, and that's a yuletide blessing for Gateway, which has been struggling to shake off losses for the past two years.
"The $3,000, 42-inch plasma TV turned a lot of heads here at Aberdeen and in the marketplace," echoed Peter Kastner, who heads the Boston-based Aberdeen Group's digital consumer technology practice. "The reason is the price point, plain and simple."
With Gateway's plasma TV priced at $2,999, analysts said the company is underselling similar-sized products by 30 percent to 50 percent.
The new TV uses plasma – a mixture of gases – arrayed in tiny gas-filled cells sandwiched between two thin sheets of glass. Using advanced electronics, an electrical current stimulates each cell, or pixel, to produce light and color – creating a vivid, steady picture.
Gateway does not make the flat-panel TV – which is thin enough to hang on a wall – and some analysts believe the original supplier is Sampo of Taiwan. In any event, the timing of Gateway's entry was impeccable.
"Retailers are telling us the Gateway entry this fall has cut in half the sales of similar-sized plasma TVs on both coasts," Doherty said.
Doherty also was enthusiastic about the consistent approach Gateway takes in educating consumers about digital TV on its Web site and in the company's nationwide chain of 272 stores.
Unlike big box consumer electronics retailers, Gateway also ensures that the digital electronic products it sells will work together when consumers get home.
"The second-biggest problem for high-definition TV in America, after confusion over cable and broadcast standards, has been the horrible experiences at consumer electronics retail stores," Doherty said. "Gateway makes sure that everything plays together."
In the last three months of 2002, Doherty estimates, total sales of plasma TVs in the United States could reach 25,000 – equivalent to all previous plasma TV sales. Gateway "clearly stands a chance to get up to 20 percent of that," Doherty added.
Still, other analysts caution those are small numbers – even for a high-priced product.
"It is a 'wow' item, and as prices come down, they will become more popular," said Michelle Abraham, a multimedia analyst for In-Stat/MDR near Phoenix. "But I don't see where they ever move into the mainstream in the next 10 years. It's always going to be more expensive than a comparably sized TV."
Josh Bernoff of Boston-based Forrester Research agreed, saying, "Even at $2,999, there aren't very many people willing to buy" the product.
He also doubts that sales of plasma TVs will come anywhere close to 70 percent compounded annual growth.
Nevertheless, Bernoff conceded that Gateway's sales approach can be an advantage as consumers who want their own home theaters "get into that zone where it gets complicated to hook up."
Besides, Bernoff added, "one of the reason retailers have big, fancy expensive products is that it gets people into the store so they can see all the other neat, fancy equipment that's on sale."
In the end, Bernoff said, Gateway's tactic makes sense for a company that is heavily dependent on consumer sales.
"They're just looking for other stuff they can sell," he said. "Clearly anyone who only sells computers is going to have trouble right now, and diversification is the only solution."
Bruce Bigelow: (619) 293-1314;
Oh please. Who do you think you're b.s.ing here? You may have some of these folks awed by your computer tecknobabble, but I've been into high fidelity all my life. Plugging some old cheap speakers into a bottomline Yamaha processor is not going to yield "little difference"...it would be night and day...providing the AB test is done above 20 decibels which is all your old Advent speakers are probably capable of. Remember, most of us who want a home theater actually want the theater experience and feel the bombs explode, not hear them pop.
Granted, you get to a point in hi-fi where more money adds little to no discernable audible benefit; it's just a matter of quality then. But what you're decribing would be plainly recognizable in a blind test to anyone. For one thing, DefTechs BP2000's have seven drivers each (not including powered sub) and are bi-polar which opens up the soundstage with indirect sound augmenting the direct waves. Your $200 system is incapable of that.
Also, your LCD doesn't match the resolution of film on a screen in a movie house...not even a $25,000 Runco 990 CRT can do that. Display systems are only as good as the source and most DVD transfers don't match the original celluloid source. Ever hear of dot crawl? Tonal mismatch? Contrast discrepancies? et al? Not to mention that film is still considered by most videophiles the best medium for recording and display, although digital is getting close.
Good satellite system. DefTech has a new acclaimed satellite/sub system, also. And no, I don't work for Definite Technology...I'm a bi-polar fan, but hear they have medication for that.
Thanks for the reassurance. Only had it a few days but I'm very pleased .. especially the picture quality. A friend bought a 55" Mitsu Diamond series for 4K. Is there much difference? I appreciate your comments, seeing that you're in the electronics business.
I have some very old (30 yr) MacIntosh speakers. Can I hook them up to my Pioneer and should I? (Also, have other old Mac electronics that I don't use anymore.)
BTW, I also saw the Ed Sullivan show, featuring the Beetles, back in the mid 60's? Oh my, guess that makes me pretty old.
Seems that you lost your way while trolling on FR. This is definitely the WRONG thread for your eyes, ears and taste. Perhaps you'll appreciate the finer things in your next life. LOL
I remember the Ed Sullivan show and the Beatles coming over here!
Oops, my mistake. The seven drivers INCLUDE the built-in powered sub. Two mids and a tweeter face the front, with the same array facing rear for the reflecting sound. The sub points out the side which is a non-issue since sub frequencies are omin-directional.
I've worked in Atlanta all my life and have never heard the DefTechs (no retailer here has ever carried them AFAIK) but I know they troll the same waters as Mirage with the Bi-Polar arrangement and many a good arguement can be heard as to whose speakers are the better.
I've have sold many a Mirage though, and if Matthew Polk hadn't made me such a sweet deal (and I do mean sweet!) on my LS90's, I would have bought the Mirage.
Best metal tweeter I have ever heard, so even when you can't place the speakers properly to take advantage of the rear drivers, they still sound like great mono-poles.
(But...oh...when you can bring them out from the walls and the bi-polar kicks in it is something like heaven)
BTW, bones....it is in the realm of music reproduction where the advantage of more expensive gear kicks in.
Movies are easy....just get the "Boom" and separation going, and you have a pleasing experience.
But music is HARD (and expensive) to reproduce.
If you truly want to hear Emmylou Harris like you are center seat, 20 rows back at the Fox Theater, be prepared to crack 5 figures.... approaching six.
Thanks for that link in your post. That is AWESOME stuff. I've been out of desktop hardware for about 2 years. Criminy they are moving fast.
Well, Merry Christmas, Happy Holidays, and good wishes to you too! I certainly can, and do, appreciate the finer things in life. Being a male in my late twenties, I can especially appreciate technology. I'm just not about to go out and plunk down what is, for me, a large amount of money on the newest toys. My reply was to the original article.
I'd love to go out and pick up a plasma screen. I just don't see myself wanting to go and spend much more than I did this week. I just wanted to make to observation that in 15 years I probably won't have to.
What's with the hostility anyway? Seriously, laughing at someone, calling them names, and belittling them for an inocuous post? Have we even ever spoken before?
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