3D TV, Google TV, DVDs getting left off wish lists this holiday season

Jim O'Neil

Couple of big disappointments shaping up to close out 2010: Google TV hasn't come close to living up to the expectations, as evidenced by Sony's price cuts on TVs featuring the Google TV platform, and 3D TV sales have tanked according to Best Buy's earnings call yesterday. Add slow DVD sales to those dogs and you have the ingredients for a pretty grim Christmas for some in the industry.

It shouldn't be too surprising to anyone. DisplaySearch in October scaled back its worldwide forecast about 6 percent and its U.S. outlook about 20 percent at the time, saying consumers were waiting for what they expected would be routine price cuts as more users adopted the technology and manufactures started producing more units.

"Set makers have trained consumers to expect rapid price falls for new technology, and consumers seem happy to wait a little," said Paul Gagnon, a DisplaySearch analyst.

November saw even more back peddling and as the holiday shopping season steps into high gear in the U.S., things have only gotten worse. Some analysts predicted 3D sales by the end of 2010 would be in the neighborhood of 1 million units for the year; sales are now trending toward a much more modest neighborhood, possibly as low as 500,000 for the year

The culprit, industry insiders say, isn't just the economy and lingering unemployment woes, but the lack of a unified sales strategy for the technology, as manufacturers introduced sets that required different types of 3D glasses and failed to connect with consumers and explain the need for the higher-priced units.

"We should have presented it to the consumer as a feature of a higher-quality television," Tom Galanis, operations vice president for Sixth Avenue Electronics, a major retail chain in the New York area, told BroadcastEngineering.

Best Buy Tuesday said sales of 3D sets were behind industry expectations, actually prompting it to cut its full-year earnings forecast. "There was confusion about 3D early (on)," CEO Brian Dunn said. "It was a little short on content."

That's a little bit of an understatement.

Retailers have found that even consumers normally eager to acquire new technology are on the sidelines this season as they wait, not only on prices to drop, but for some serious content to be put forth.

"There's a bit of a chicken-and-egg dynamic-content makers don't want to make 3D if there isn't going to be anybody to watch them," Gagnon said.

Will content producers step up to the plate and roll out more 3D programming? Probably. CE manufacturers say adding 3D functionality to TVs is so cheap it doesn't make sense not to make a bet on the technology. It'll be on my Christmas list for sure--next year. -Jim