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Brand-Name Models Below $200; Possibility Of $49 Units On Black Friday

By Susanne Ault -- Video Business, 10/23/2009

OCT. 23 | PHYSICAL: Blu-ray Disc set-top player sales are dropping at lightning speed, with a number of retailers hoping they’ll help drive the overall electronics holiday business.

Stores have been surprised that even the brand-name models that offer all the bells and whistles, such as Web interactivity and Netflix streaming, are sinking to less than $200. During last year’s fourth quarter, the biggest Blu-ray player deals featured mostly off-brand, non-Web-enabled models, such as Meijer’s $149 Sylvania player.

This year’s low price points on advanced Blu-ray models should keep the product competitive with other consumer electronics on families’ holiday wishlists, such as the $259 Kindle or $199 Wii, say analysts and stores.

“We are doing better than we initially expected, which is due to the price drops,” Abt Electronics owner Jon Abt said. “The price drops were expected, but we didn’t think it would be this deep this quickly. BD Live players [most of which offer streaming movie services] are now available in sub-$200 models.”

Year-to-date, Chicago-based Abt Electronics is running 50% ahead in Blu-ray set-top unit sales over the same 2008 frame.

NPD Group notes that between January and August 2009, 65% of all Blu-ray set-top purchases were of models priced between $200 and $299. For the same 2008 frame, the vast majority of all such purchases, at 75%, were for Blu-ray set-tops marked between $300 and $399.

Also through August, 14% of Blu-ray unit sales were for sub-$200 set-tops. During the same period last year, NPD recorded no players sold at that level.

Examples of players now tagged at $199 at most retailers include the Panasonic DMP-BD60, which streams Amazon Video On Demand, YouTube and Bloomberg news; the Samsung BD-P1600, which offers Netflix, Roxio CinemaNow and Web music service Pandora; and the LG BD370, with Netflix and Roxio CinemaNow.

“We’ve seen very strong growth in Blu-ray players this year. It has been a bright spot in a very gloomy industry landscape,” said Ross Rubin, NPD director of industry analysis. “Nearly all other electronics device categories have been down, such as digital cameras and MP3 players.”

Rubin added that currently, Blu-ray unit sales make up 15% of overall U.S. high-definition/standard-definition home video player purchases. Yet he expects that will hike to 50% of unit sales in 2010 if current demand and pricing trends hold.

“The streaming products have been popular where they’ve accounted for a greater portion of the Blu-ray player units sold,” added Rubin.

With mass pricing already dipping to below $200 on brand-name models, Rubin doesn’t think it is out of the question to see $49 Blu-ray player offers around Black Friday.

“It’s conceivable we could see a $49 Blu-ray player on Black Friday, but I think we’ll see more $99 deals,” said Rubin. “Anything is possible.”

Texas-based retailer Bjorn’s hasn’t enjoyed the same high growth levels with its Blu-ray player sales, blaming mostly a tough economy. Its own Blu-ray unit sales are running about flat with last year. But the store does believe that price drops have helped ramp up awareness for the product, which will come in handy when consumers return to normal spending habits.

“I think Blu-ray players have gotten more mainstream acceptance,” said Doug Bravin, Bjorn’s chief operating officer. “People know this is the future.”

©2009 Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.