PC makers getting into consumer electronics

Interesting article over at PC World examines why PC manufacturers are getting into the TV business and what natural advantages they have over consumer electronics vendors.

The jump from PC to TV is less of a stretch today than it would have been just a few years ago. As manufacturers gear computers more toward entertainment, and as televisions gain more features typically found in PCs (think DVD recorders and Internet connectivity), the devices become more compatible.

Gateway already sells plasma and LCD TVs, and Dell is shipping its own LCD TV. Hewlett-Packard executives have hinted that HP will begin selling TVs in the next few years. PC makers could offer both good deals and advanced technology in a rapidly evolving marketplace, analysts say.

PC makers are well positioned to enter the higher end of the market because of (1) their being accustomed to a faster rate of innovation and their technological expertise which will translate into the ability to add new features such as wireless network connectivity, storage, etc. (2) more efficient operations which allow them to offer lower costs and operate at lower profit margins (10-12% compared to 30-40% or so for the CE vendors).

After less than a year, Gateway is the best-selling brand of plasma TV, topping Sony, an established CRT television maker, O'Donnell says. Gateway's 42-inch enhanced-definition plasma TV, launched last November, garnered a 28 percent share of the market in six months, according to sales figures from Gateway and NPD retail point-of-sales data.

Gateway is succeeding in consumer electronics because it offers great deals, O'Donnell says. Its 42-inch plasma HDTV sells for $3999 at Gateway.com, whereas a 42-inch HDTV-ready plasma model from Sony lists for $5999 on BestBuy.com.

Via Bubble Generation.

Posted by Narasimha Chari at 05:47 PM | Permalink

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