CE Giants Brace for Holiday Gold Rush, But Remain Wary of New Competition, Says ABI.

Business Editors/High-Tech Writers

OYSTER BAY, N.Y.--(BUSINESS WIRE)--Nov. 25, 2003

Along with preparations for blockbuster sales of perennial consumer electronics (CE) favorites, such as DVD players and high-end TVs, leading CE vendors -- while continuing to focus on cost cutting measures -- must contend with an influx of new players in the arena, says technology research firm ABI.

Traditional PC makers such as HP, Dell, and Gateway are eating away at the market share of CE vendors. With depleting revenues in the traditional PC industry, they have realized the high revenue potential in the CE industry; their success is shown in these companies' recent earnings statements. According to ABI's latest research in the CE industry, on average just in the TV, DVD and digital camera markets, traditional PC vendors have generated about 20% of their revenue from selling CE products in the US alone. "This attrition will continue to grow," explains Vamsi Sistla, ABI's Director of Broadband Research, "while the consumer continues to benefit with a much wider selection of vendors and brands."

This new competition is also expected to affect the average prices of these digital products, with overall prices dropping by 22%. ABI expects prices to drop 28% to 32% within the next two weeks, just in time for the peak holiday shopping period.

Some of the recent key findings delivered through ABI's Residential Entertainment Technology Service include

-- While high-end plasma TVs are still priced in the 5 digit

range, vendors such as Boxlight, NEC, Hitachi and Pioneer

boast entry-level plasma TVs in the range of $3,200 to $5,999;

-- ABI forecasts worldwide LCDTV shipments will reach 9.14

million units by 2008. ABI also forecasts OLED technology will

be a significant competitor to LCD technology in the large

size TV category (greater than 30"); and

-- The 40" plasma display TV will reach price points around

$4,000 by 2004. In Japan and Europe, the plasma TV market is

much further ahead than that of DLP-based direct displays.

Even with tough competition from other technologies, the

plasma TV market will grow 50% per year for the next three

years, after which the growth rate will drop to 25% through

2007.

Most CE vendors are increasingly offering combination products, combining leading features such as DVD, PVR, DVD audio, SACD, HD with computing power, and multimedia networking. "This centripetal force of gadget consolidation," continues Mr. Sistla, "will pave the way for a whole new set of combination devices and platforms, erasing the clear distinction the CE industry has been making among standalone devices."

ABI's Residential Entertainment Technologies Quarterly Service (RETS) offers the latest market forecasts for different display technologies including liquid crystal display, plasma and digital light projector, as well as for other digital devices such as DVD players-recorders, digital audio products, personal video recorders, game consoles, and wireless and network-enabled digital products. RETS provides detailed market segmentation coupled with insightful analysis, and clients are given quarterly updates of the latest trends, news, and vendor announcements.

About ABI

ABI is a N.Y.-based technology market research firm founded in 1990. ABI publishes market research and technology intelligence on the wireless, automotive, electronics, broadband and energy industries. Details can be found on the web at abiresearch.com or by calling 516-624-3113.