- ‘You Have to See It to Believe’
- Prices Coming Down
Best Buy president and CEO Hubert Joly confirmed this week what The Online Reporter has been saying for months:
- Consumers immediately see the improvements of UHD sets over HD sets even when playing HD content because of UHD sets’ upconversion capabilities.
- You have to see it to believe it — “it” being a UHD TV’s superior video quality.
- Media companies are working on 4K content although Joly did not provide any details except to say that Netflix has some.
- Prices of UHD sets are dropping into the “affordable for many buyers” space but are not yet in the space of mass market prices.
Best Buy: 1,900 stores worldwide
Joly and Best Buy chief financial and chief administrative officer Sharon McCollam were speaking on a teleconference call with financial analysts Tuesday morning, August 26, 2014. See: http://www.nasdaq.com/aspx/call-transcript.aspx?StoryID=2233493&Title=best-buys-bby-ceo-hubert-joly-on-q1-2015-results-earnings-call-transcript
Noticeably missing from Joly’s statement about UHD sets were two of the most recognizable names in TV sets: LG, which is shipping UHD sets but that we rated as inferior to Samsung’s, and Vizio, which is not yet shipping its new line of UHD sets that include a 50-inch set that’s definitely priced at a mass market price of $999.99.
We’re a bit more optimistic about the short-term sales outlook for UHD sets than Joly is because we have visited Best Buy and other companies’ retail stores and talked to their sales reps, but Joly is definitely optimistic about the sales outlook for UHD sets in the 2015/2016 time frame.
Excerpts from Best Buy’s May 2014 Statements about UHD
During the May 2014 teleconference call with financial analysts, UBS’ Michael Lasser asked:
“As you alluded to the industry [CE industry] really does need to drive innovation. And I was hoping you could expand on where you think that will come from mostly around the holidays and then moving into next year.”
“As relates to category growth drivers, getting into the next several quarters, holiday and next year, I would list probably a small handful of them. One is in home theater, ultra-high definition TV. Obviously we do expect some traction there, a) because from the customer standpoint it’s materially different; and b) because we [Best Buy] will be the destination for ultra-high definition TVs with our Samsung and Sony stores in the stores, our Magnolia design centers, etc.”
“Is the Acceleration of UHD Happening?
During this week’s teleconference call, Best Buy’s Sharon McCollam said in response to a question:
“Is the acceleration of Ultra-High Definition TV happening? There is no question about it. I saw an analyst report out this morning on the topic. Clearly I don’t know if anyone out there that is better positioned than Best Buy with our 800 new Samsung and Sony Home Theater stores-within-the-stores. I don’t know how you could be better positioned to go after this new opportunity, not to mention, and I have to call this out, are the blue shirts [Best Buy sales reps] that are supporting that in our stores. Their knowledge of UHD, I’d have to say, we would put it up against anything in the industry right now and we’re very proud of that.”
Joly on UHD
During this week’s teleconference call, Joly was asked about consumer response to UHD and whether there are some things like content that need to change. He was asked whether UHD content is needed to make UHD a bigger driver of top line results (revenue) at Best Buy.
“What’s very exciting about UHD compared to 3D a few years ago is that the customer benefits are immediately tangible and meaningful in the form of improved image quality, which is a huge driver of demand for very large screens where the number of pixels is very important.
“What’s very positive today is that even without new content you have upscaling so that with the existing content the customer sees a material difference. When they go to our stores we can show them the difference between HD TVs and UHD TVs. I urge everyone in the country to make a visit to one of our stores where we have the Samsung and Sony [UHD] experiences. Walking into the store you don’t know you need a UHD TV. After 10 minutes seeing the product and talking to Best Buy reps, who are hyper-trained in UHD TVs, you’ll know that you need it. The only question you’ll have is when and which model it will be…
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