report suggests that the rate of penetration for LED televisions
will increase next year. The increase is being attributed to
"vendors increasing their number of large-size high-resolution TV
units for sale," the report claims, citing market observers. LG
and Samsung are among the firms that are expected to continue
building larger LED televisions while discontinuing overall CCFL
This is a nice theory, but it is contradictory to the current
trends in TV sales. Television sales
have been declining
for a long time -- a
long time. The declines started
more than three years ago
. Sales have yet to rebound.
The simple reason for this is because of the nature in which
TVs are produced and purchased. They are large and expensive
items that are designed to sit in a room for 10 or more years.
Unlike computers, they are not prone to viruses, software
malfunctions, hardware failure and other issues that could cause
the unit to die prematurely. TVs are also produced without the
need for frequent upgrades.
Thus, most consumers buy a TV knowing that it will last for a
several years. This allows them purchase an expensive set with a
degree of confidence.
Most consumers have already made that purchase. Unless LG and
Samsung have something major planned for 2013, they are unlikely
to persuade consumers to buy another TV next year.
If the report is right and LED TV penetration is about to
increase, there must be a catalyst -- and it
be Apple (NASDAQ:
Apple has an interesting way of reigniting old or stagnant
markets. Prior to the release of the iPhone, consumers did not
wait in line to buy new smartphones. Research In Motion (NASDAQ:
) was successful, but its reach was limited. Apple changed that.
The Mac maker inspired consumers to get out of bed early, drive
to the nearest Apple Store and wait in line for hours to purchase
This trend continued with the iPad. There were tablets before
Apple entered the market, but only the iPad was able to
produce long lines
Apple may not have the same level of success with its first
television, which is rumored to be called iTV. However, if any
company has the potential to increase the penetration of LED TVs,
it is Apple.
Unfortunately for investors, that may not be enough to save
the stock. Early this morning Apple announced that it had sold
more than two million iPhones
in China, setting a new record for the company. Investors
initially responded by raising the company's value less than one
percent in pre-market trading.
Investors gave Apple a similar reaction after the company
announced that it had sold
five million iPhones
immediately after the iPhone 5 was released. When the newly
sold three million units
, investors all but cringed.
Meanwhile, when a hot rumor suggests that Apple is three
months away from releasing an iDevice upgrade, investors go
crazy. They have sent the message that they love rumors of
potential iDevices but hate it when Apple announces high sales
figures for its
Apple has lost more than 27 percent of its value since the
iPhone 5 was released on September 21. Comparatively, Apple rose
more than 19 percent in the three months leading up to its
release (June 20, 2012 to September 20, 2012).
(c) 2012 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.