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2005 ushers in the next phase of the FCC tuner mandate. Here is
an update on what is required of manufacturers, plus an overview
of how some major players plan to respond.
Under the FCC order, TV manufacturers are forced to phase in integrated
ATSC tuners into roughly half of all 25 to 35-inch TV lines by
July 1, 2005. By July 1, 2006, all sets measuring 25 inches or
larger must include digital TV tuning. In the final phase, all
other sets between 13 inches and 24 inches must have ATSC tuners
by July 1, 2007.
These are the more affordably priced TVs, hitting the bread-and-butter
category for TV makers, as this segment appeals to a much larger
audience than larger screen models affected by the mandate last
year.
There is a loophole where manufacturers can continue to sell true
monitors without a DTV tuner as long as they do not include NTSC
(analog) tuners, as many plasma displays and front projectors
are sold today.
TV makers are concerned over the lackluster response consumers
gave the integrated sets in 2004, which featured a price premium
of $300 and only offered uni-directional CableCARD functionality.
Most consumers opted for the monitor version, satisfied with the
set-top box furnished by satellite or cable providers, which includes
a digital tuner. Now adding a $300 price premium on smaller-size
sets (many selling for under $500) in order to keep compliance
with the '05 FCC mandate looks even less promising to manufacturers.
Here's how some manufacturers have responded. Thomson-TCL Electronics
announced at CES that it will introduce seven RCA direct-view
TV models featuring integrated ATSC tuner/decoders and 480i (interlaced)
Standard Definition Digital TV (SDTV) image resolution.
Greg Bosler, TTE's North America Profit Center executive VP, said
the company has been working diligently to offer an affordable
solution to the DTV tuner mandate and has arrived at a system
that will command a premium starting for as little as $100. An
entry-level RCA 27-inch integrated SDTV will start at $269, he
said. Screen sizes for new SDTV models - which are essentially
analog televisions with digital tuners - are 27 inches and 32
inches in standard 4:3 aspect ratios. The company said it is targeting
consumers who want to replace a TV in the bedroom or the den with
something that is digital, but isn't high definition. RCA will
also offer HDTV monitors in 27-inch and 32-inch 4:3 direct-view
CRT screen sizes.
In an effort to avoid any additional consumer confusion, Sharp
is biting the bullet early in the cycle and only shipping rear-projection
TV sets with ATSC and CableCARD-ready tuners. Bob Scaglione, Sharp
marketing senior VP, noted that some retailers have requested
only ATSC and CableCARD-ready rear-projection TV products from
vendors in 2005. He added that the [retail] price delta for integrated
tuning isn't that much higher, so consumers are opting for full-tuner
solutions, thinking they may need the capability in the future.
Sharp said it will include ATSC tuners in all 37-inch and larger
AQUOS LCD-TVs by July 1, 2005, and for all LCD-TVs with 16:9 screen
sizes below 37 inches, AQUOS offers a choice of integrated tuning,
or HDTV monitors.
Toshiba Marketing VP Scott Ramirez said his company will continue
to carry HDTV monitors through the first half of 2005, before
transitioning the line over to 100% fully integrated HDTV sets.
Ramirez added: "The market being what it is, the consumer
is voting for HD monitors now. If we go to 100% compliance in
March 2006, as we've requested, then probably in the first quarter
of 2006, most companies will completely change over to integrated."
The caveat for Ramirez is in LCD and plasma sets. "In flat
panel, you are at a much higher price point, where the customer
is looking for the highest technology," he said. "There,
I think integrated products are much more sellable." The
company is looking at offering a mixture of fully integrated and
monitor-only flat-panel televisions in 2005, but the majority
of the models will include ATSC tuning and digital CableCARDs.
Samsung planned to phase in integrated tuning into many of its
DTV direct-view and rear-projection DLP displays around the middle
of last year. But, in microdisplay rear-projection models, those
plans were delayed by several months. This year, any model in
the Samsung line with a screen size of 36 inches or larger will
be introduced as a fully integrated DTV set, said Jim Sanduski,
Samsung Visual Media Products marketing VP.
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