Monday, January 21, 2013

4K & Osborne Effect

Once again, the movie makers are giving advice to the TV industry about how to run the TV business. Taking the theatrical cinema folk's advice about home TV, even home theater is why the TV industry spent so much time hyping 3D well before its time. A basic premise in the article is incorrect regarding TV sizes. In general, the public had found its way to sitting at the retina limiting distance for standard definition TV. In the transition to HDTV, with twice as many scan lines, they had to either get a set that is twice as tall or sit half the distance to still be at the retina limiting distance. Instead, the public mainly bought 32" wide screens that are exactly the same height as a 27" square screen and sat at the same distance. Since the transition, the average size LCD TV has crept up from a 32W to a 38W. The public is still not taking advantage of HDTV resolution, let alone doubling it again.

Normally, I would not be one to criticize the industry regarding anything done to increase profitability in what is largely a profitless business. However, sometimes the things that are done to increase ASPs actually discourage sales. In the early 1990's TV set sales were depressed by talk of HDTV. The discussion in the press about the new standard lead people to believe that HDTV was just around the corner and many postponed buying a TV set thinking that they should wait and get an HDTV. Talk of a new standard frequently discourages sales of current models. This is known as Osborn effect for Adam Osborne driving his own company out of business talking about the next model Osborne Computer, that wasn't ready, and consequently not being able to sell the current one. I believe that 3D had a similarly chilling effect. And now comes 4K.

As I said in a previous post, 4K will be a great boon the digital signage. No doubt it will garner some consumer sales as well. However the net effect on total consumer sales dollars will be minimal if it is positive at all. Currently, widespread realease of 5G smartphones is not expected until 2020. However, whith smartphone prices climbing into the $1000 range, sales of 4G smartphones during 2019 may be impacted by consumers postponing purchases to get the new 5G technology.

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