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Sell More, Earn Less!

May 19, 2010 | Author: sysadmindgs

Thinking about entering the LCD HDTV business? Here are some numbers that might make you rethink that plan. According to Quixel Research, unit sales were up in the first quarter of 2010 compared with the same period in 2009, which sounds like good news. However, first quarter revenues declined from $5.2 billion in 2009 to just $4.1 billion in 2010. That’s a drop of almost 27%. Ouch! And that’s even with some impressive growth rates in the larger sizes, 55″ diagonal and larger.

There’s no doubt that the HDTV business is brutal; sometimes I wonder if the only companies making any money on them are UPS and FedEx. And sure, manufacturing costs continue to come down, so it makes sense that prices will drop as well. But there aren’t many businesses where you can have growth in unit sales paired with revenues dropping by more than a quarter in just one year. Just see what happens when you ask a car dealer to give you that kind of a deal.

The net result is that I expect to see continued consolidation in the mid-range brands, as companies decide it’s not worth trying to keep up with the big dogs in this race.