[South Florida DX Association] Picture Tubes Are Fading Into the Past

[Bill Marx]

>From The AM List...
-Bill W2CQ



Picture Tubes Are Fading Into the Past
By ERIC A. TAUB
Published: August 7, 2006

The bulky, squarish, heavy picture tube, the standard television technology
for more than 60 years, is heading for the dustbin of history much faster
than anyone expected.

This year, the number of TV models in the United States that use glass
cathode-ray tubes to produce an image has been reduced sharply. By next
year, even fewer C.R.T. televisions will be made, and fewer retailers will
sell them.

"After the holidays, the days of picture-tube TV's are gone," said Geoff
Shavey, the TV buyer for Costco. "One year from now, we will not sell
picture-tube TV's."

Costco, a discount warehouse chain, , has already cut its picture-tube
offerings to three models this year, from 10 in 2005.

Instead, Costco and other retailers are selling growing numbers of
wide-screen plasma and liquid-crystal display flat-panel TV's, which are
more expensive than traditional TV's. But prices for both types continue to
drop: 42-inch plasma TV's can be bought for less than $2,000, and the
smallest flat-panel sets will soon be fairly close in price to their tube
counterparts.

Mr. Shavey said that a 32-inch wide-screen L.C.D. television was available
for $700 at his stores, within striking distance of a tube set of similar
size. But he added, "The demand for picture-tube TV's is far off from what
it was one year ago."

One reason is that flat-panel TV's make a strong design statement, prompting
women to want to swap their old sets for sleeker ones, said Mike Vitelli, a
senior vice president at Best Buy.

"For the first time in history, women care about the TV that comes in the
house," Mr. Vitelli said. "Men are not just getting permission to buy a
flat-screen TV - they're getting directed to do so." Soon, he said, Best Buy
will sell picture-tube TV's only under its Insignia house label.

Consumer electronics companies also want out of the tube TV business, in
part because profit margins have become so thin. The government has mandated
that all TV's eventually include a built-in digital tuner to receive
over-the-air digital broadcasts, and while even picture-tube sets are being
made compliant, manufacturers would rather switch to selling thin-panel TV'
s, which can generate bigger profits.

"The end of picture-tube TV's is accelerating faster than a lot of us
expected," said Randy Waynick, a senior vice president for Sony Electronics.
The company, which offered 10 tube models two years ago, will pare that
number to two next year, both of them wide screens. "Picture-tube TV sales
reductions were far greater than forecast," Mr. Waynick said.

Even if the profit margins were healthy, picture-tube TV's would be
ill-suited for a market that wants ever-larger screens. Picture-tube TV's
were once made as large as 40 inches corner to corner, but the units were
the size of baby elephants, sometimes weighing hundreds of pounds and
protruding several feet from the wall.

Panasonic is getting out of the picture-tube business altogether. A year
ago, the company offered 30 picture-tube models in the United States; now it
sells one, a 20-inch analog set. "This year will be the last year for
Panasonic picture-tube TV's," said Andrew Nelkin, a Panasonic vice
president.

Toshiba has cut its picture-tube models to 13 - from 35 last year - and
expects the number in 2007 to be "significantly reduced," said Scott
Ramirez, a vice president of marketing. "Beyond 2007, the picture-tube
business is very questionable for any company," he said.

Picture-tube TV's represented 78 percent of the market in 2004 but will
account for only 54 percent this year, according to the Consumer Electronics
Association, a trade group. In the same period, sales of flat-panel units
have jumped from 12 percent of all TV's sold to an expected 37 percent this
year. Front- and rear-projection TV's will account for about 9 percent of
sales in 2006, according to the group.

"C.R.T. as a technology is fading out of the market," said Sean Wargo,
director of industry analysis for the association.

The ascendance of flat-panel TV's signals another sea change for the TV
industry: the switch from somewhat square screens to wide rectangular ones.
The vast majority of flat-panel TV's are built in a wide-screen shape that
allows movies to fill all or most of the screen. More television series are
being produced for this format, and consumers are growing more accustomed to
viewing programs this way, electronics executives say. "A wide screen gives
a much more impressive picture," Mr. Shavey said.

New technologies seldom replace their predecessors entirely, and
picture-tube TV's will still be available for those who prefer them. But
they will increasingly be available only in discount stores, where they will
be sold under house brand names and by less prominent manufacturers like
Funai, which owns the Symphonic, Sylvania and Emerson brands.

"We think there is a continual business for us in C.R.T. TV's," said Greg
Bosler, executive vice president of the TTE Corporation, which owns the RCA
brand. Mr. Bosler, who counts Wal-Mart as a key customer for its TV's, noted
that a 27-inch L.C.D. TV was still priced around $800, while an RCA digital
picture-tube set of the same size could be bought for $350; an analog
version was $240.

Even so, the company expects to double its flat-panel offerings next year.
It will reduce its tube models to about 15 in 2007, from 26 this year.