Plasma TV boosts Gateway picture - (42 " HDTV flat-panel display for $3,000)

The San Diego Union Tribune ^ | December 28, 2002 | Bruce V. Bigelow

[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;

[fightinJAG]

You asked about blogs . . .

As for reading blogs, I would say start at the (gasp) msnbc site. I think there is a feature there called blog central or something like that. It leads you to a whole blog menu, plus has a way for people to rate the blogs and recommend the top ones.

Then you can surf from blog to blog. If you are interested in blogs in your area (local politics, etc.), you might have success googling blog + a keyword about your area.

Hope this helps.

[bonesmccoy]

No squinting needed. The LCD projector is capable of screen resolution which far surpasses the ability of most plasma units. Even sporting events (baseball/football) appear to be fine.

As for your claim that 4:3 aspect ratio blocks the "rest of the picture", the InFocus unit has a 16:9 switch which I use for any widescreen presentation.

So, no, we don't experience any loss of "screen" on my 14 foot diagonal 16:9 aspect ratio picture.

You still haven't posted how much you spent for your "thumping" sound experience.

My portable system cost $4000.

How much did your fixed, analog "thumping" cost?

[A Navy Vet]

"The LCD projector is capable of screen resolution which far surpasses the ability of most plasma units. Even sporting events (baseball/football) appear to be fine."

I'm not comparing plasma units to projectors...apples and organges. "...the InFocus unit has a 16:9 switch which I use for any widescreen presentation. So, no, we don't experience any loss of "screen" on my 14 foot diagonal 16:9 aspect ratio picture."

Glad to hear your projector is capable of widescreen. However, if you're pushing that LCD projector with 900 lumens and contrast of 400:1 to a 14'screen, I can't imagine much of a picture. The larger the screen (wall in your case), the more lumens are needed which also impacts on your black levels. 400:1 contrast ratio is a business environment range...poorly suited for true home theater viewing. "You still haven't posted how much you spent for your "thumping" sound experience."

Probably about 3 times as much...I've acquired it over time. You didn't post what kind of power your Yamaha is putting out, nor what kind of speakers used.

Look, enjoy your portable system, but don't blow smoke up our backside and try to say it's a "great" home theater experience. If you are truly showing a 14' screen on a painted wall for 15-20 people, then it must be in a moderate to large room. For that you need brightness and good black levels on the video side, power and large drivers on the audio side. The system you described doesn't have either. BTW, your speakers are analog, and the most important part of the audio chain.

[daviddennis]

While I thank you for your kind words about my reporting, the Media Center PC is all about the consumption of media, not its production. It implements copy protection technologies to placate the Hollywood lobby.

I would not bless MSFT or GTW for producing the Media Center PC and therefore making it possible for people to produce their own professional videos. The Media Center PC is not what makes this possible; rather, it's any Mac or Wintel system with video editing software, which is not part of the Media Center add-on package.

Windows XP, with or without Media Center, has "Movie Maker 2", which is said to be enormously better than the absolutely dismal Movie Maker 1, which I have tested and found pathetic.

I used professional-grade acquisition (Canon XL1) and video editing (Final Cut Pro on a Mac) to produce my reports. It's great that this will become easier for more and more people to do, but to get truly professional results, professional tools are still what it takes.

And this has nothing to do with the Media Center PC, although Microsoft is at least said to have improved the previously dismal Windows video editing experience.

Personally, I'll still stick with my Macs.

D

[1Old Pro]

LCD projector (1600 bucks at dell.com).

I hear the bulbs are $200-$300 a pop. I hope they can last for a long time but I hear you might need 3-4 bulbs a year making a projector an expensive medium for TV.

[bonesmccoy]

You watch 8000 hours of TV in a year?

[bonesmccoy]

Interesting comments.

Isn't loading Adobe Premiere a simple matter of loading the application on the MediaCenter PC?

Just because you're using MSFT WinXP does not lock you into using MSFT MovieMaker2. The point is that the MediaCenter line of PCs has a methodology for saving video files on the fly.

In reviewing the information at microsoft.com it appears that the MediaCenter PC's do not save the MPG2 compression files in a file format readable by MovieMaker2. I am not sure of Premiere can read the files. Premiere is a far better editing package than MovieMaker. It is affordable and with your GL1 or a SonyDV camera you can make NTSC broadcast quality video.

I disagree with your statement that "truly professional results" require pro tools. PCs have permitted the usual home user to acquire computing technology that far surpasses the "pro tools" from five years ago.

I recently re-racked a 20 year old video tape made in 1985. The commercials and news reports are easily matched with a GL-1 and a standard video editing package.

Regarding file formats, I suggest mpg2 as the standard and not .avi or quicktime files. While MacOS is nice, the entry point for PC technology is roughly 25% the cost.

This leads us to conclude that Mac's are really only for graphic artists and those "pro" graphic shops that require such applications. Certainly, the tablet PC architecture will negatively impact Apple in the graphic arena because the pressure sensitive tablets give the artists greater control over the digital image than any existing Mac system. 2003 will be interesting to watch.

[mdmathis6]

I know what you mean..."Trading Spaces" marathons four hours back to back on Saturday night(ot "while you were out")....arrrgh. I get chased away from my home theater to watch DVD's on my smallish monitor/pc in my bed-room.

[mdmathis6]

Sure beats replacing a picture tube, assuming the electronics hold up, and firmware is up-datable it sure could be the last "TV" I could ever own.

[daviddennis]

My point was meant to be that you didn't need a Media Center PC to run Premiere, Windows Media Player or any other video editing program.

As a full-on nerd, I have always loathed Windows, so the PC alternative doesn't tempt me. I have a $3,000 PowerBook (1ghz with SuperDrive), and it's absolutely stunning, well worth the bucks.

Macs are for anyone who wants a better computing experience and is willing to pay a little extra to get it.

D

[bonesmccoy]

You you're a conservative when your home has multiple PCs and monitors. The liberal would have only one monitor, which is centrally controlled (i.e. only one person gets to watch anything). The conservative family finds multiple media centers (which are paid for by each individual consumer). The liberal family has a meeting, discusses viewing options, takes a vote, and then watches whatever the dictator wants anyway.

For some reason alot of us have women telling us what we get to watch.

Tonight I am watching FOOTBALL. I am KING!

HA HA HA

Don't touch my NCAA BCS!

[bonesmccoy]

Nice machine! Powerbooks have always been cutting edge. Certainly, a portable MacOS Powerbook has alot of horsepower.

Let me reassure you that WinTel is for the most nerdy of nerds. In fact, if you really believe in the "revenge of the nerds", one only need look as far as the origins of MSFT and Intel.

Real conservatives use WinTel.

Is it easier to rip a DVD or CD on a PC or Mac?

I was under the impression that the copy guard features on MacOS were tighter than on PC's. It sounds like you take issue with that. What is the feature you are describing on WinTel (are you referring to copy guard features under Windows Media Technology?)?

You can certainly produce excellent work using a PowerBook Mac and DV camera with IEEE-1394 (firewire) transfer capabilities.

Your Canon GL-1 and the Sony VX-1000 have similar capabilities. One positive is that the Canon GL-1 can change lenses. Have you used that feature much?

The Sony VX-1000 permits digital video capture at 720x480 pixels at 29.97fps. I think the VX-2000 matches.

These two cameras are the best cameras for the consumer market that Freepers can buy to match a digital video editing standard which we're discussing.

What is the video editing package you are using? Premiere?

I know that After Effects has an excellent package of digital effects to go with Premiere.

Most "pro" shops use Avid. I think Avid has both Mac and PC based solutions, but I am not a "pro" video editor.

How did you guys archive your digital videos on the web?

Independent servers on a fixed/static IP addy?

[daviddennis]

Considering that Wintel has about a 95% market share, I would say that most people use WinTel, whether they are real conservatives or the Michael Moore types.

People who believe in higher quality, beautifully designed computers use the Macintosh. That's why we're so fiercely loyal. To me, Windows is a garbage product for people who are willing to settle for junk to save a few bucks. But that's only me :-).

I use Final Cut Pro 3, which was originally Macromedia Final Cut. Due to financial pressures, they sold out to Apple, so this excellent program is available only for the Mac. It's worth getting a Mac to use.

Avid is comparable on features but has an almost vertical learning curve. If you haven't learned to edit on an Avid system, you're going to be a lot more productive faster using Final Cut Pro.

I never liked Premiere; Final Cut is loads better and is just incredibly feature-rich. Its manual is the size of a brick and has over a thousand pages.

Macs have no copy protection features at all. The Media Center PC is way "ahead" of the Mac in this regard.

Ripping a CD is as simple as loading the CD in the drive and punching a button on iTunes, the included music player software. It's fast and easy. I haven't tried DVD recording yet, but I'm sure it's easier than on a PC.

The camera I have is the XL1, not the GL1. (The GL1 doesn't have interchangeable lenses). I bought the XL1 before the GL1 was introduced, or I might have bought that instead (and saved about $2,000). The interchangeable lenses would be nice if all the available options weren't $1,000 plus. I'm sure that if I actually did solid commercial work that was pulling down real bucks, I would have gotten the wide angle and pro-style lenses for my camera.

I happen to own an independent server myself, so naturally I use that. Simplifies thing a lot :-).

Hope that helps.

D

[mdmathis6]

I'll bet you're watching it on the spare TV in the Den.....lol lol(just kidding!)

[bonesmccoy]

very funny!

[SamAdams76]

Plasma or LED? The debate rages on.

[SW6906]

Love it. Look how far we’ve come. I’m currently watching The Matrix on my 42” LCD that cost me several hundred dollars a few years back.....

[SamAdams76]

Maybe if Apple gets rid of that leftist hippie bastard Steve Jobs and bring back John Sculley they will start moving again

If only Apple had done that, who knows where they would be today.