Supply constraints in flat-panel TV should greatly reduce the kind of fourth-quarterprice volatility that disrupted the CE industry during the 2006 holiday season and beyond.
That's the conclusion of Jim Ristow, executive VP of Home Entertainment Source (HES), who shared his outlook with members of the specialty A/V buying group today in the first of an ongoing series of quarterly Webinars.
Ristow said production cutbacks and reallocation of inventory to foreign markets by some vendors will result in tightness in key panel sizes in both plasma and LCD. The hardest hit category will be 42-inch plasma, which is “almost completely gone” as manufacturers shift production to the more profitable 50-inch panels -- which may experience spot shortages themselves.
That's a sensible, rational sounding theory. But as any economist who doesn't have his head completely up his own ass will tell you, forecasts based on rational behavior come unglued because most people are not "rational actors."
I'll tell you what I think is going to happen:
In Canada, retailers are going to drop their collective pants to try and persuade as many Canadian shoppers as possible to not cross the border for all of their holiday needs. At the same time that we see a real bloodbath in the Great White North, U.S. retailers are going to do their damnedest to buy market share in the face of a declining consumer base. The mortgage debacle and the associated credit crunch have stroked out a whole swath of over leveraged conspicuous consumers in one go (go ask
WC Varones what he thinks about that). That's going to put the onus of holiday sales on the shoulders of far fewer consumers, which means that retailers are going to have to go after timid, credit-weary shoppers with insane discounts.
"And best of all, YOU CAN FINANCE THE WHOLE THING!" won't be the winning battle cry of salespeople this year, methinks.
But then again, what do I know?
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