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;
Please humor me. When did this problem develop? One day, one week, one month after you fired it up? That's the most bad pixels I've ever heard of.
Rest assured you bought the best (mass marketed) Rear Projection set available.
(and at a very good price, I might add)
The Pioneer 50" Elite Plasma is also a top notch performer, but it's $10,000... alas.
The $5000 (now $3000, thanks to Gateway) sets just do not perform anywhere near as well.
$200 for 5.1!?....LOL!
Beats the TV speakers, perhaps, but that's it.
If you look hard enough, you might find a $200 speaker that's ok. Keep in mind, that's ONE speaker.
A decent 5.1 system (5 speakers, sub woofer, and Dolbly Digital Receiver is a grand...minimum.
Mine is relatively modest: Pioneer Elite 55" rear projection; Adcom preamp, Marantz processor, various medium-range sources, Proceed 3 channel & Adcom 2 channel amps, Definite Technology bi-polar main fronts with 300 watt powered 15" sub in each, Mirage rear and center channel drivers. All in a 15x20 room. Looking at a Marantz DLP based front projector (scaler included) that's comparable to a Runco CRT system for a third price.
The new generation chips don't have that problem from what I've seen, plus they're brighter than LCD.
Meant to ask you if this is 14 feet? Oh my, that's quite a creative way to watch home theatre. DVD and TV? How do you feed the TV picutre?
I used my eyes. You wrote nothing about cobbling a system together.
Do yourself a favor though, and start saving to replace them. Part of the magic of 5.1 is when it becomes "seamless" ...which can only happen when the speakers are timbre matched (or voiced) to sound the same.
ie. sonically the same. That way the pitch doesn't change as the sound moves from speaker to speaker.
I had some big $800/per Polks on the side with a "good" Atlantic Technology $300 center speaker. When I replaced the Atlantic Tech with the "proper" Polk center, the improvement was astounding. Same tweeter, don't you know.
For anyone looking to build on a budget, I suggest getting a good Yamaha (or my favorite) Denon receiver for around $400. Get 3 MATCHING front speakers (LCR...meaning Left / Center / Right) and the BEST subwoofer you can afford ($300 or better). Use your old stereo speakers for your surrounds (or rears) until you can match the front.
One all-in-one set I really like is the Mirage AVS small speaker system (4 identical speakers with matching center) which is usually matched with a Mirage sub and Denon/Yamaha receiver and sold as a package for $999.
Surprisingly good!
Stay away from Bose....not only outrageously overpriced, but poor sounding as well. The above system beats the $3000 Bose like a poor redheaded lefthanded step-child.
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