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Retailers Set To Struggle Selling Big 4K TV's

By David Richards | Monday | 11/11/2013

As Australian retailers get set to spruik Ultra High Definition TV's new research conducted by ChannelNews reveals that consumers are more likely to take a "wait and see" attitude when it comes to buying a large screen 4K TV.

Consumers claim that "price" and a "lack of 4K content"  is the primary reason that they will delay buying a 4K TV this holiday period. 65% of consumers questioned whether the technology was another 3D TV issue with vendors accused of spruiking new technology in an effort to stimulate falling TV sales. 

3D which was seen as a flop by consumers has made many buyers of large TV's "wary" of investing in new TV technology early on in the technology cycle.

A JB Hi Fi spokesperson said "4K TV technology is new and people looking for a new large TV are buying 4K models, what has been a problem is that vendors went out and promoted Ultra High Definition TV's but failed to supply retailers with stock, this led to a lot of people coming to the store to see a 4K TV which was not in stock, these people were primarily early adopters who wanted the technology and price was not an issue. These consumers have not come back".

New ABI research reveals that the Asia Pacific region is set to be an early adopter of 4K technology with Australia being the exception due to the pricing of 4K TV models. China where 4K TV's are 45% cheaper than in Australia is set to lead the way.

Questions havebeen  been raised about the pricing in Australia of 4K TV's.

In the USA Chinese TV Company TCL is selling a 50" model with similar specs to the Australian 64" model for $999, this is $4,000 cheaper than the Australian offering that recently went on sale in Australia. 

In recent weeks Sony has reduced the price of their 55" and 65" 4K TV's with the 55" priced at $4299 and their 65" at $5996, this is almost parity with the price of the same TV's at Best Buy in the USA. 

Overall US pricing for 4K TV's is 25% cheaper than in Australia. According to ABI Research the USA market is anticipated to be the first region to eclipse 5 per cent (in 2017) and 10 per cent (by end of 2018) of TV households owning a 4K TV.

Despite limited 4K content, declining 4K TV prices will facilitate the expansion of the installed base through normal upgrade cycles the Research Company claims. 

According to senior analyst Michael Inouye, despite a very limited installed base there have already been a number of 4K trials from broadcasters, pay TV operators, and satellite operators. 

"While many point to the 2014 FIFA World Cup in Brazil and Sochi Winter Olympics as highlights for 4K, these events will have a minimal impact on 4K adoption - it's simply too early."

Price remains the most critical factor for 4K TV adoption, but OTT services such as Sony's Video Unlimited 4K service and display features such upscaling will help early adopters bridge the content gap and raise consumers' valuation of 4K as a TV feature. 

Consumers are conditioned from the mobile market to perceive value in higher resolution screens, with marketing such as Apple's Retina Display branding the experience. This halo should carry over to 4K TVs. In addition, as new products that support 4K hit the market, like the upcoming next generation consoles from Microsoft and Sony or select Qualcomm Snapdragon 800 based mobile devices, consumer awareness will continue to expand.

Practice Director Sam Rosen added: "Unlike 3D, which required awkward glasses, 4K has the legs to become an industry norm.

This isn't a sprint, however, and it will take time for the necessary infrastructure, installed base of devices, and content to come together before 4K becomes an integral part of how the typical TV household consumes video content. We expect this could start to happen as early as 2018 in some regions. In the meantime, many consumers will have 4K panels without 4K content, or 4K game consoles without a 4K display, and will claim a superior 4K experience even though the technical merits are not quantifiable."

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