TECHNOLOGY Lower prices and DVDs rocket sales of HDTVs

Prices for HDTVs have dropped significantly since they were introduced four years ago.
JACKSON, Miss. (AP) -- It's shaping up to be a digital holiday as sales of high-definition televisions exceed the expectations of analysts and retailers.
Both credit a superior picture -- not a looming Federal Communications Commission broadcast change -- as the reason for HDTV's strong showing.
The FCC has set a 2006 deadline for all tuners to receive digital broadcasts rather than analog, but Lehman Brothers analyst Scott Nesson said that few consumers consider that when they're purchasing the digital-ready HDTVs, which offer lifelike sound and picture quality.
"Our sense is that the consumers aren't paying any attention to the deadline," Nesson said.
A million extra
Analysts had forecast that about 2 million sets would be sold this year, but manufacturers and retailers now say the payoff will be bigger. By the end of 2002, about three million units will be sold industrywide, said Dave Arland, a spokesman at RCA, a maker of widescreen high-definition sets.
Arland said the effect of the pending FCC changeover "has been negligible. If this was totally driven by broadcasting, we would be talking about handfuls of sets, not millions of sets."
"I think the technology is really catching on with the public. Part of what's driving digital TV sales is the growing popularity of DVDs, which show up beautifully on high-definition televisions," said Jim Babb, spokesman for Circuit City, based in Richmond, Va. Babb said his company's high-definition sales have been strong all year.
Double-digit gains
Julie Kresnik, a spokeswoman for Minneapolis-based Best Buy, said her company's consumer electronics division -- the category in which high-definition sets fall -- had double digit third-quarter sales gains.
"People who are buying our product are some of our more technology savvy customers," she said.
Lower prices are another factor. Nesson, the Lehman analyst, said the average dealer selling price has dropped from around $6,000 in 1998, when the sets were introduced, to about $2,000 this year.
But even in a struggling economy, consumers aren't just buying the cheaper models.
Sears Roebuck and Co. is selling liquid crystal display and high-end plasma televisions, which can cost up to $8,000. The retailer rolled out both products in September, and spokesman Larry Costello said those sales "have exceeded our expectations."
Costello said the company also saw a 20 percent jump in sales of all big-screen televisions, including traditional ones, in October and November.
Consumers who opt to buy traditional, or analog, sets this Christmas should not worry that the TVs will be obsolete after 2006, said Margo Davenport, an FCC attorney.
Davenport said after the changeover, set-top converter boxes will be available for consumers who want to receive broadcast stations. The boxes cost several hundred dollars, though the price could fall as demand increases.