• Analog TV sales to see dramatic declines in 2005.
• DTV tuner mandate takes chunk out of analog direct-view business.
• Flat-glass direct-view sets continue to advance on curved-tube sales.
• Analog projection TVs nearing end.

As television manufacturers begin to put digital television tuners in more sets and as the government moves to impose a hard cut-off date for analog television broadcasting, we may be witnessing the final years for analog television sales.

Government mandates for inclusion of digital tuners in all televisions will begin to have a major impact on analog television in 2005. Starting July 1, 2005, manufacturers must equip 50 percent of all the televisions they sell in the 25- to 36-inch screen sizes with digital tuners, making them, in effect, digital television sets, although some models will convert those digital signals to analog form in order to be displayed on CRT screens. Digital-to-analog converter boxes and cable and satellite television services will assure analog TVs sold this year will have many more years of use, but the government-imposed digital tuner mandates quickly are bringing an end to the analog chapter of television manufacturing.

Source: CEA Market Research

Analog Sales Decline Continues:
Based on CEA estimates, sales to U.S. dealers of standalone analog direct-view CRT televisions will decline a whopping 56.6 percent to 8.6 million units in 2005. This is due to the acceleration of the FCC’s DTV tuner mandate, which will require half of all sets with screen sizes measuring 24-35 inches to include digital tuners by July 1, 2005, making them digital television sets. Even before the mandate hits, sales of non-HDTV direct-view television sets for 2004 (including TV/VCR and TV/DVD combo units) were down 6.5 percent, at 23.5 million units. Standalone analog direct-view color CRTs declined 4.1 percent to 19.9 million units.

Still, about 84 percent of all televisions sold in 2004 were non-HDTV “analog” direct-view TVs with CRT picture tubes. Replacement and additional set purchases for analog direct-view color TV represent more than 90 percent of all sales.

This shows that despite the allure of high resolution pictures in digital television models, a majority of consumers remain motivated by bargain price points. The average price for an analog direct-view TV is expected to drop to $152 from $176 in 2004. Meanwhile, manufacturers have fine-tuned analog TV technology to get superior pictures out of inferior (by DTV standards) signal sources.

Analog TV Combo Sales Drop:
Even sales of analog direct-view sets with built-in VCRs or DVD players (TV/VCR, TV/DVD, and TV/VCR/DVDs) are feeling the impact of the DTV transition. According to CEA numbers, 3.6 million TV combination devices were sold in 2004, down from 4.4 million units. Category sales are projected to drop more than 49 percent in 2005 to 1.8 million units. The average price, meanwhile, will increase from $186 to $193 as more consumers opt for larger screen sizes and DVD players over VCRs.

Flat is in for Direct-View TV:
To mark a change in the otherwise mature category, manufacturers are placing more emphasis on style and design, making trusty old analog picture tube sets resemble their new high-tech DTV cousins. Perhaps the biggest trend in analog (and digital) direct-view CRT designs in the last three years is the proliferation of sets incorporating picture tubes with virtually flat screens. In fact, some manufacturers are phasing out lines of curved glass direct-view sets altogether, in favor of the popular flat-glass models.

LCD TVs for Analog Signals:
Another popular twist on old technology is small flat-panel LCD TVs, which now are marketed for special applications in specific rooms of the house such as kitchens and bathrooms. LCD TVs with screen sizes below 20-inches are designed for use with analog signals only, and are not equipped with connectors to accept DTV signals. These have 4:3 aspect ratios as well. Typically, larger models have 16:9 widescreen aspect ratios and are designed for both DTV and analog TV in put, as well as PC data, in some cases.

Analog Projection TVs Slip:
No other analog television category is feeling the impact of DTV more than analog projection TV. Factory sales of analog rear-projection TVs sold 97,000 units, down from 276,000 units the year before. The average price for an analog projection set was $876, down from $1,062 in 2003. Still, the handful of manufacturers still delivering analog projection models expect the market to support sales of 32,000 units in 2005, according to CEA reports. The average selling price for an analog projection model in 2005 is expected to decline to $563.

Source: CEA Market Research, 1/05