PriceSCAN Blog

An even more impressive drop has occurred in the price of the TomTom One XL, falling from a minimum of about $400 to under $250 today.

Time Period: 4/30/2007 through 12/10/2007
Each tick mark represents one week
Red = High Price, Blue = Average Price, Green = Low Price

These and many other GPS units have seen price declines in the days since Thanksgiving, but the magnitude of these reductions may be limited by margin-shrinking price cuts earlier in the year (we could be seeing a similar phenomenon in the flat-screen television market – see "Saving Green on Flat-Screens, After Black Friday"). Following twenty or thirty percent drops over the last eight months, you have to wonder how much lower prices can go this holiday season.

In any case, this is an excellent time to combat rising fuel costs with a newly inexpensive GPS. Then, the next time your environmentally conscious friends start talking about drowning polar bears and barren penguin rookeries while wearily eyeing that Panzer sitting in your driveway, you can point out that you get from point A to point B with all the twelve mile per gallon efficiency modern global positioning technology will allow.

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November 23, 2007

Saving Green on Flat-Screens, After Black Friday

Electronics | Nov 23, 07

At the risk of contributing to the annual post-Thanksgiving media driven retail sales hype, I thought I'd take note the severe price cuts we've already seen on LCDs and plasmas as we moved into the holidays.
The most popular flat-screen television on PriceSCAN is currently Sony's KDL-52XBR4 52 inch BRAVIA XBR High Definition LCD WEGA, which in early August was going for at least $4,500 and is currently offered for under $3,000.

Time Period: 8/6/2007 through 11/12/2007
Each tick mark represents one week
Red = High Price, Blue = Average Price, Green = Low Price

It's a similar story with the Panasonic TH-50PZ700U, the top plasma and second most popular television on this site. Back in April this set was going for at least $3,400; today you can get one for under $2,500.
Time Period: 4/16/2007 through 11/12/2007
Each tick mark represents one week
Red = High Price, Blue = Average Price, Green = Low Price

Going down the list of televisions on our site, you’ll see the same pattern of 25%-33% price reductions among many of the most sought-after models.
As summer passed into autumn and concern over an end of year slump reached fever pitch, prices on flat screens were slashed repeatedly. These early cuts may limit downside price action as the holiday shopping season progresses, since profit margins may have already been sharply compressed. But come what may, those buying now can be assured they're getting into the flat-screen market at deep discounts to introductory prices.

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November 11, 2007

What Brown Has Done For Zune

Electronics | Nov 11, 07

Right now you can buy a first generation brown Zune – that's brown, not any other color – for less then a hundred bucks.

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October 23, 2007

A Shopper Without The PriceSCAN Toolbar Is Like Bill Gates Without A Monopoly

Electronics | Oct 23, 07

Sometimes, in this wacky free market world of ours, you could use a little competitive advantage, and that’s why we created the PriceSCAN Toolbar.

The PriceSCAN Toolbar is a quick download that integrates with your IE 7 browser. Once installed, if you’re on any web page and see the name of an item you’d like to check on PriceSCAN, all you have to do is highlight that text, right click and choose “search PriceSCAN for selection”. You’ll see displayed the same result you’d get had you come to our site and searched for that term. It’s as simple as that. You also get a browser search bar that allows you to check our site for the price of any item you enter
Because it’s from PriceSCAN.com, there’s no spyware, adware, malware or any other evil weaselware that some sites hide in their toolbars. It’s just a straightforward consumer aid that will level the playing field this holiday season. Who knows – maybe it will foster greater competition, thus holding down prices and giving the world’s central banks more leeway to cut interest rates and alleviate the current credit crisis.
The PriceSCAN Toolbar – just doing our part to help save the global economy.

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October 18, 2007

"But Blu-ray's An Amazing Technology… OK, What If We Cut The Price, Let You Pretend To Shoot People And Throw In Spiderman 3?"

Electronics | Oct 18, 07

Sony will reportedly release a $399 PlayStation 3 with a Blu-ray player and, yes, a free copy of the afore-mentioned "Emo-Boy As Arachnid" cinematic masterpiece.

Right now the new 40 GB PlayStation would tie for the least expensive Blu-ray player on the market, selling at the same price as Samsung's BD-P1000. To be sure, it is more expensive than Toshiba's HD-A2 HD-DVD player (at a bit less than $250), but of course neither this unit, the Samsung or other high-def players offer the PlayStation's game functionality (which, incidentally, is said to not include the ability to play PS2 games).
Perhaps as significantly, this brings the cost of a PlayStation into near parity with that of typical Wii system "bundles" (which generally include games and accessories)and in the middle of the Xbox 360 range (indeed, the Microsoft Xbox 360 Halo 3 Special Limited Edition System is going for $399.99). Thus, Sony has moved to put serious price pressure on both high-def video players and game consoles, including Nintendo's spectacularly successful offering. To further drive the point home, Sony also dropped the price of its 80 GB PS3 by a hundred bucks, to $499, a price already reflected in the market place by vendors on PriceSCAN.com
This may well be the first shot in a price war that will grip the video game and high-def video player markets throughout the holiday shopping season, which, judging by this move, now begins just after Columbus Day.

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October 5, 2007

"Good Morning Mr. Gates – The Functionality Of This Zune Music File Will Self-Destruct After Three Plays. Good Luck, Bill!"

Electronics | Oct 5, 07

Sounds like Microsoft's own version of "Mission Impossible", doesn't it?

Yes, songs shared between Zune users will still be playable only three times by the receiving device. Even those sold without copy protection.
The redesigned, slimmer Zune will reportedly be available with 4 GB and 8 GB of flash memory (for $150 and $200, respectively) while an 80 GB hard drive version will sell for $250. But Redmond has social-networking dreams - and hey, who doesn't? Thus, Gates & Co. intend to seduce the Facebook generation with a musical taste-driven profile site, imaginatively dubbed "Zune Social", presumably to facilitate the sharing of those only three times playable files.
In the wake of the relatively lackluster response to the first generation Zunes ("zune (zōōn) v. To violently drop in price, esp. before the holidays.") one could be forgiven for hoping Redmond would come up with a more attractive value proposition. And indeed, the firm making one million or more DRM-free MP3s available via Zune's Marketplace is a welcome development, and the touch-activated Zune Pad and wireless PC-synch features are at least interesting. But the Zune's pricing offers no discount to Apple's iPod line, millions of songs are now available without copy protection from other online retailers, and Facebook and others are already facilitating music sharing. One has to question how attractive the new Zune will be to anyone save committed foes of white earbuds. And these Zunes will be more costly than many offerings from Creative, SanDisk and others, placing in doubt its ability to penetrate the market niches of these players.
Which brings up one other change. The new Zune's will not be available in the original's signature color of brown. ("The Zune: Microsoft's Little Brown Lump Of DRM-Enforcing Digital Joy"). Try to get over it.
Now, on the other hand, if there was some way to play "Halo 3" on the thing…

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September 11, 2007

iPhreaks

Electronics | Sep 11, 07

The announcement of the "iPod touch" highlights iPhone issues that seem ironic given Apple's founders' reported early careers.

Readers of this blog could have learned much of the feature set of the “touch” back on Jouly 27th ("iGroans and Vist-ful Thinking"). Noting difficulties with slow web access via AT&T's Edge network versus rivals using 3G technology, I wrote: "Rolling out an iPod with iPhone screen and Wi-Fi technology would allow users to sidestep a contractual obligation to a lesser technology, one Apple may now be finding a barrier to sales." That's pretty much what Cupertino has done, with an accompanying price cut on the iPhone and a rebate to that product's early adopters (there's also a new iPod nano, and like the iPod touch this release was foreshadowed by vendors dropping older models ahead of the news – see "Retailers Drop iPods Ahead of Apple's "Surprise" Announcement").
While a cheaper iPhone without the "phone" is one answer to an undesirable carrier, the other logical alternative is an iPhone with a 3G carrier. While Apple is for the time being contractually unable to offer this option, some programmers and/or hackers seem to be taking it upon themselves to do so. Depending on one's interpretation of the Digital Millennium Copyright Act (DMCA) it may or may not be legal to sell solutions allowing the unlocking of an iPhone so that it may be used on other networks, but an exception to the act is said to allow individuals to do on their own. Several firms are currently vowing to provide unlocking products to the public.
With Cupertino allied with AT&T in an effort to squelch these renegade efforts, one can't help but marvel that Apples co-founders and its current leader reportedly got their start in business together as members of the legendary "Phone Phreaks". This early '70s band of paleohackers notoriously hijacked Ma Bell's long distance network for fun (Steve Wozniak is said to have phoned the Vatican pretending to be Henry Kissinger; he was told the Pope was sleeping at the time) and, occasionally, profit .(Jobs and Wozniak reportedly had a short-lived business manufacturing "blue boxes" that permitted users to avoid toll charges on calls).
That AT&T, in defending its exclusive rights, should find itself depending on a firm created and lead by those who were once the scourge of its existence might seem ironic enough. Yet perhaps there is one more twist to this scenario. Suppose the Edge network is in fact proving a drag on iPhone sales. If users and/or unlocking solution providers cannot legally or practically be stopped from liberating the iPhone from AT&T, then it's not beyond imagination that this new form of "phreaking" might actually be a boon to iPhone acceptance. And, albeit through no action of his own, Steve Jobs might find himself in common cause with those who, it might be argued, are the spiritual heirs of his youth.

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September 5, 2007

Retailers Drop iPods Ahead of Apple's "Surprise" Announcement

Electronics | Sep 5, 07

Here at PriceSCAN.com we've noted that several major retailers have stopped selling key iPod models during the two weeks before Apple's "mystery" announcement, which is to be made later today.

Jobs & Co. have been tight-lipped about exactly what the new hotness is, but a huge clue is to be found in PriceSCAN's data on the decline in the number of merchants selling some of the most popular iPods. This withdrawal has been particularly acute in the case of the 80 GB Video iPod and the 30 GB iPod, but we're also seeing a significant drop-off in the number of sellers offering Nanos, particularly the 2 GB and 4 GB models. This may reflect some awareness in the retail community of the imminent release of new iPods, especially in the video-enabled, large hard drive category. If more advanced models are coming, retailers may prefer not to be caught with a lot of older inventory they might have to mark down after the new releases, and thus may not have replenished their supply of current models in the wake of summer and back-to-school sales. And of course Apple itself could have chosen to throttle down production of the outgoing models to make way for the next generation, thus preventing retailers from restocking and possibly sending them a signal that new models are forthcoming.
In any case, it appears the lack of current model availability has resulted in something of a price squeeze in some cases. For example, as the PriceTrend graph below demonstrates, the lowest price offered by vendors on this site for an 80 GB black Video iPod has risen from around $325 to just shy of $350 in recent weeks.

Time Period: 9/18/2006 through 8/27/2007
Each tick mark represents one week
Red = High Price, Blue = Average Price, Green = Low Price

Perhaps we'll see a new Video iPod incorporating the iPhone's touchscreen technology; something like what I dubbed the "iPhod" back in July (see "iGroans and Vist-ful Thinking"). And in light of the exit of some large sellers from the Nano market, there may well be a new version of this model as well.
In the minutes before a tsunami hits the shore, the tide tends to recede in an ominous retreat. I suspect Cupertino is treating us to a similar phenomenon, and around 10:00 am west coast time that big wave of Jobs-driven hype should crash down on us all and may well confirm at least some of this hypothesis.

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August 24, 2007

The Long, Slow Death of Digital Rights Management

Electronics | Aug 24, 07

Universal's decision to offer music downloads free of DRM, and, incidentally, of iTunes is just the latest sign of an emerging trend to eliminate copy protection.

The sans-Apple angle to Universal's move comes despite Steve Jobs' call for dumping DRM (see "How Steve Jobs Could Show He's Sincere About Eliminating DRM"). Jobs' herald has already been answered, however imperfectly, by EMI in its decision to offer at least some of its catalogue on iTunes without DRM, albeit at a slightly higher price ("So The Whole Digital Rights Fight Is Over A Lousy Thirty Cents?"). By offering DRM-free music through e-tailers like Amazon, Wal-Mart, Real and so forth – but not iTunes – Universal Music Group appears to be turning Jobs' initiative against him, using the persistence of DRM on UGM's iTunes downloads to engineer a competitive disadvantage for Apple, presumably to undermine the supremacy of the dominant player in internet music sales. Perhaps the intent is to acquire leverage in ongoing iTunes royalty negotiations with Cupertino.
Between the rather low value placed on copy protection by EMI and Universal's seeming use of the technology as a tool for corporate jousting, one has to question the anti-copyright violation arguments for DRM as put forth by the RIAA and others. Perhaps to truly appreciate this, one has to frame the issue historically. Remember when dubbing to cassette destroyed music sales, or when the VCR annihilated the market for VHS movies, or perhaps when the copy machine made book purchases a thing of the past? No? That, of course, is because these calamities, all darkly prophesied by the content industry, never occurred. I doubt these facts are lost on anyone, including the Cassandras of the music industry.
Thus, as indie labels and artists, having occasionally produced music someone might actually want to listen to, freely sell without DRM, the majors and the media colossi that own them may be realizing their flagging sales have more to do with lousy product than piracy. With high-def video downloads potentially threatening the DRM models of HD-DVD and Blu-ray ("High-Def Disks? We Don't Need No Stinking High-Def Disks"), I suspect the HD video market may be next to experience the death of DRM. But fear not, all ye DRM proponents; for a new recording technology will surely emerge and engender new calls for copy protection.
Foolish ideas, like the Phoenix, tend to rise from the ashes.

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July 27, 2007

iGroans and Vist-ful Thinking

Electronics | Jul 27, 07

So initial iPhone sales came in well below many Wall Street estimates, even as Apple moved a whole lot of Macs and iPods. What gives?

Apple says it sold 270,000 iPhones in the 48 hours after its release, while AT&T claimed it signed up 146,000 new iPhone accounts. Apple's number was at the low end of estimates; by contrast, some Street analysts were looking for around 700,000 units sold in this period. Now Apple pointed out that broad acceptance of the iPod was a multi-quarter affair, and excellent sales of that product and of the Mac tempered any disappointment.
Yet the disparity in results may say something more about what is and isn't working, not only for Cupertino but for Redmond as well. The less than ecstatic reception afforded Vista by the market ("Vista And The Vox Populi") has engendered a willingness among buyers to take a fresh look at the Mac, vaulting Apple to the number two slot among computer manufacturers. One has to believe there's a fair chance synergy with the iPod/iTunes model is helping as well. As for the iPhone, reviews seem pretty strong when it comes to the device's form factor and touchscreen display ("Apple Takes iPhone Developers On Safari"). Less enthusiastically received is the speed of web access through AT&T's Edge network, which is slower than rivals using 3G technology. And of course there's the matter of that $499-$599 price range, considerably richer than the cost of many high-end cell phones, and, for that matter, a lot more than iPod.
Given what are said to be fat margins on iPhones, Jobs & Co. may have room to cut prices, and indeed that may be Apple's next move. But the web is rife with rumors of a more intriguing stratagem: a next-generation iPod that sports a screen interface similar to the iPhone's, and perhaps Wi-Fi connectivity as well. Unbundling the phone functionality in this way would still leave users of such a new iPod able to surf the web at a hotspot, and would presumably lower the price. While having the phone feature is great in principal, Apple's execution and choice of carrier has made it costly, not simply in terms of the unit itself but the required two-year commitment to Edge. Rolling out an iPod with iPhone screen and Wi-Fi technology would allow users to sidestep a contractual obligation to a lesser technology, one Apple may now be finding a barrier to sales.
Maybe they could call this new hybrid the iPhod?

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July 2, 2007

The Supreme Court Thinks You Should Pay Higher Retail Prices

Electronics | Jul 2, 07

Apparently, the Supreme Court believes less choice is good for you.

In a 5-4 decision, the sharply divided court just overturned a 96 year-old ban on agreements requiring retailers to sell at or above minimum prices fixed by manufacturers. Previously, such "minimum advertised price" (MAP) agreements were held to be violations of the Sherman Antitrust Act, restricting retailers from competing to offer consumers the lowest price.
Now, however, the Court has eliminated the ban on such price-fixing, meaning that even if a retailer is willing and able to cut prices, the manufacturer may forbid such discounting. And, rather incredibly, the majority argues that such price floors benefit you, the consumer.
How can this be? The reasoning goes like this: low-priced vendors (like many internet sellers) might be offering a more bare-bones sales process and less service, and without hand-holding and the soothing environment of a brick-and-mortar retailer, you might not come to fully appreciate the wonders of a given product. Thus, the product's manufacturer should be able to mandate a higher price, to insure you don't "make a mistake" and save money by buying from a discounter, only to have the enjoyment of your purchase diminished by poor retail support.
Of course, many of us have come to appreciate the superb technical knowledge and personal charm that the sales reps of high cost physical chains possess. Heck, most would probably be designing mission-critical systems for NASA were they not also such compulsively helpful "people persons". And who would deny the delightful, inviting atmosphere of most big-box retail fortresses?
Now, fortunately, if you're foolish enough to want to pass on all that just to save some silly money (about $750-$1000 per year for the average family of four, according to estimates noted by dissenting Justice Stephen Breyer, writing for a minority that included the pro-business David Souter), the Supreme Court has stepped in to save you from yourself. A manufacturer may forbid a retailer from offering you a discount as a condition of carrying its products.
How has the Court ill-served the consumer? I'd say let us count the ways, but they are so numerous that space here only permits me to hit the highlights:
Under minimum price agreements, small retailers who compete on price will lose their edge, no longer able to offer the choice of a discount versus the higher-touch service of giant chains. Large manufacturers and big-box retailers are free to legally collude on price, crushing competition. Unable to cut prices and with no other way to hedge against poor sales, many smaller players may be unable to take the capital risk of carrying such items, leaving consumers with only the large, high price stores to buy from. You're no longer free to choose the lowest possible price.
Some might argue that competition between manufacturers will save the day, as firms cut minimum retail price on similar goods to gain advantage. There is some truth in this, but serious problems as well. The ability to control retail pricing makes it far easier for manufacturers to effectively collude on price; the economic literature has long included studies of the ability of firms to establish de-facto pricing agreements between one another through behavioral signaling, eliminating the need for explicit (and potentially illegal) agreements. Further, for producers that enjoy effective monopolies on their products, through either intellectual property (e.g. patents, copyright) or compatibility/lock-in effects (e.g. operating systems) little or no such inter-manufacturer competition exists, so with discounters eliminated, the retail price stays high.
Speaking of academic studies… so as to justify minimum pricing agreements, defenders of this decision appeal to arguments of the so-called Chicago school of economics. Full disclosure; I got my doctorate from Wharton, where these theories are not unknown. I find much to admire in this rubric, and have published papers partially motivated by such reasoning. But it must be said that misapplication of Chicago logic lead some to defend indentured servitude and contracts requiring buyers of real estate to agree not to sell to people of certain ethnic and/or racial backgrounds. Milton Freidman's noble "free to choose" shibboleth has been sadly vulnerable to Orwellian distortion, so that some claim the "freedom" to oppress others. The legalization of monopolistic predation may not have quite the dark moral connotations of those other examples, but surely to defend the elimination of consumer choice in the name of free markets smacks of rank hypocrisy.
Adding insult to injury, the new policy is also inflationary. Breyer noted that only one thing is certain under this decision: higher prices, and, while many other factors may bring prices down, all things being equal (ceteris paribus, for all my econ pals), the dissenting justices are correct – this should not come as welcome news to a Federal Reserve fighting ongoing inflationary pressures.
Lastly, in what some might call a last, cynical coup de grâce, the majority acknowledged the possibility of harm to the consumer, and invited aggrieved parties to prove such damage by suing on a case by case basis. Can you imagine small-fry vendors spending years and millions in legal fees to sue some Fortune 500 manufacturer or retailer every time they are confronted by this newly-legalized price-fixing?
Before this decision, manufacturers could choose to control sales by opening their own retailers, and for those that provided some genuine benefit, this model allowed them to charge more when selling through such channels (think Apple, for example). There was nothing wrong with this, But to forbid discounting by third-party retailers tramples the rights of consumers and runs roughshod over fundamental rights of property and fair trade.
There’s some small irony that this insult to freedom occurs just before the anniversary of American independence. Now as then only Congress can remedy the situation, so if you value your freedom in the marketplace (not to mention your money), call or write your elected representatives and demand a ban on these anticompetitive manufacturer's minimum price agreements.

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June 14, 2007

Apple Takes iPhone Developers On Safari

Electronics | Jun 14, 07

Apple's new release of its Safari browser for Windows should trigger a bumper crop of applications for its new iPhone. Why?

Cupertino has decided that independently developed iPhone apps will be web-based, meaning they can be created, tested and demonstrated on almost any computer the can run Safari. This now includes XP and Vista machines, immediately and vastly broadening the potential pool of developers. Further, legions of iPhone users surfing the web with Safari will only encourage site designers to optimize their pages for Apple's browser, which in turn could allow Safari to gain market share among all web users, especially given the availability of Safari for Windows. That greater Safari adaptation makes iPhone web surfing more attractive, spurring sales, and thus the virtuous circle Jobs & Co. surely dream of becomes complete.
There are a few challenges on the way to realizing this rosy vision. The iPhone uses AT&T's Edge cellular, which is slower than competing 3-G networks. The iPhone's Wi-Fi capability may not completely make up for this; handheld browsing seems a bit less untethered if a hotspot must be sought out to speed one's downloads. And there's the issue of the iPhone's touchscreen. Slick and innovative, to be sure, but early word indicates it takes some time to get the hang of typing on the flat screen. (My guess is, if the screen works well, at least the texting young masses will adapt. After all, typing on a clamshell cell is no joy, and using your finger in place of a mouse opens up a whole new spectrum of potential applications).
Perhaps the biggest question regarding the iPhone's impending launch is the effect of its steep price, reportedly $499-$599 in addition to the signing of a two-year contract with AT&T. How many people will kick their Blackberry addiction to take that deal? How many parents will indulge their tech-savvy offspring?
Jobs has been known to launch products whose high price point outweighed impressive technology and design – I'm showing my age here, but remember the Lisa? The NeXT? To justify a multi-hundred dollar premium over existing cell phones, the iPhone is really going to have to bring it, and that means being a lot more than an iPod with a dial tone. The Safari strategy seems more than sound, and early iPhone buzz is quite good, though slow Edge-based data transfer is said to be a fly in the ointment, Yet until consumers are actually presented with the opportunity to buy, the viability of Apple's pricing will be uncertain. In the weeks following the iPhone's scheduled June 29th launch, we'll again explore the question Steve Jobs has been putting to the marketplace for more than two decades:
What price cool?

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June 6, 2007

The Blu-ray Premium: Has The Wii Taught Sony How To Say “Pyrrhic Victory” In Japanese?

Electronics | Jun 6, 07

A few days after Toshiba's HD-DVD price cuts, Sony is marking down Blu-ray, and its PS3 may well be next.

Last week I noted that, in the wake of Toshiba's re-pricing, entry-level HD-DVD players were selling at steep discounts to similar Blu-ray machines ("We Still Refuse To Pay You To Own An HD-DVD Player!"). At the time I noted the Blu-ray premium could be indicative of reported greater demand for the Sony standard, though neither Blu-ray nor HD-DVD can yet be said to have gained widespread acceptance. Now Sony has cut the list price of its BDP-S300 from $599 to $499, crediting improved efficiencies of production and a drop in component costs for its ability to do so. Does this mean Sony is blinking in the face of Toshiba's aggressive pricing?
Not necessarily. First, it's worth noting the new Sony pricing brings the BDP-S300 more in line with that of other firm's Blu-ray players, notably Samsung's BD-P1000, now offered for slightly less than $430. But there may be more to it than this. Compared to Sony's Blu-ray equipped PS3 unit sales, Microsoft's has sold three times as many Xbox's and Nintendo has sold twice as many of its newer, white-hot Wii consoles. Currently, the PS3 is offered for no less than $599 by merchants on PriceSCAN.com, compared to $299 to $480 for various Xbox models. The Wii goes for around $250. These price differentials may well have cost Sony considerable market share. Even if the PS3 is regarded as a kind of "sacrifice play" to enhance Blu-ray acceptance (see "Blu-ray May Avoid Betamax's Fate…Even If The PS3 Isn't So Lucky") that stratagem would be blunted by unit sales constricted by a high price point. If Sony can now make Blu-ray players for less, it might behoove the firm to pass on that savings to prospective PS3 buyers, and indeed the web is rife with speculation such a move is imminent.
But Microsoft is offering an HD-DVD drive for the Xbox, and the cheap and popular Wii raises the question of whether many gamers even care about high-def. In this environment, a Blu-ray-driven PS3 discount may be the first shot in a tech and price war that could run right through the summer and into the holidays.

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May 31, 2007

“We Still Refuse To Pay You To Own An HD-DVD Player!”

Electronics | May 31, 07

At least Toshiba can still say this about its pricing, following the firm's latest round of price cuts.

Back in March I noted that introductory-level Blu-ray players were selling at a substantial premium to similar HD-DVD models (“Blu-ray May Avoid Betamax’s Fate…Even If The PS3 Isn’t So Lucky”). I argued then that this could be related to reports of Blu-ray sales far outstripping HD-DVD. Now, with Toshiba’s previous intro unit, the HD-A1, now phasing out in favor of the HD-A2, we’re seeing a repeat of the sharp discounting the A1 experienced. Back in October this model went for at least $500; Toshiba recently reduced the retail price to $399, but vendors on PriceSCAN.com are already listing the unit below $300, a stunning 25% further discount. The A2 still does not provide full 1080p output, however. For this, you’ll need at least the HD-A20, which has also seen a sharp reduction in price, from at least $500 in late March to as little as just under $380 today.

Time Period: 10/2/2006 through 5/28/2007
Each tick mark represents one week
Red = High Price, Blue = Average Price, Green = Low Price

To be sure, Blu-ray players have seen significant discounting as well – the entry level Samsung BD-P1000, had dropped from $1000 at its introduction about a year ago to $450 when I wrote about it in March. It’s slipped slightly since then, offered for just below $430, still significantly more than the cheapest HD-DVD player (and it can output 1080p). Of course you can also get a Blu-ray player through the purchase of a PS3 game system for about $599, and Playstation sales have surely helped to catalyze the Sony products market penetration. Either way, it appears a significant segment of early adapters are willing to pay up for Blu-ray.
What could change this? One word: content, and Toshiba is getting a little help here from Warner Home Video and. the Wachowski brothers. With the Matrix Trilogy in HD-DVD, Toshiba may garner the ultimate proof-of-concept release. Now time will tell if the combination of this kind of eye-popping demo and sharp price cut will get consumers to plunge into the HD-DVD world, or if they’ll choose to take the “Blu” pill, as it were.

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May 24, 2007

Flat-Screen Inflation?

Electronics | May 24, 07

We're getting used to rising oil prices, but higher-cost flat-screen televisions are another matter.

In the wake of reported remarks by a Philips exec to the effect that seasonally high demand might spur rising flat-panel prices later this year, I thought I'd revisit my March 11 post ("Are Large Flat Screen Makers And Retailers Taking A Break From Price Cutting Each Other Into Oblivion?") and see if the price stabilization/increase I discussed back then has continued. As can be seen from our PriceSCAN Plasma and LCD television indices, the rate of price decline had continued to moderate, especially for wider screen models. And in the case of some best-selling sets, we are already experiencing modest price increases. Some examples are more dramatic than others; the most popular Panasonic plasma on PriceSCAN.com, the 42" TH-42PX600U, was selling for around $1000 three months ago while the current lowest in-stock vendor price on this site is now just under $1600.

Time Period: 7/3/2006 through 5/14/2007
Each tick mark represents one week
Red = High Price, Blue = Average Price, Green = Low Price

Yet even the number one flat-screen television on PriceSCAN, the 46" Sony KDL-46XBR2 Bravia XBR High Definition LCD WEGA, saw its price flatten out months ago, with a modest increase in the lowest offered price over the last couple of weeks.

Time Period: 7/31/2006 through 5/14/2007
Each tick mark represents one week
Red = High Price, Blue = Average Price, Green = Low Price

To be sure, this is still mainly a story of newfound stability as opposed to a steep across-the-board price hike. But, following the steep declines of last year, this is still quite a shift. Sharply falling tech prices have been one of the factors holding back inflation in recent years, and one has to wonder about the macroeconomic implications of an end to this trend. Meanwhile, if you're spending this Memorial Day weekend sitting on a beach contemplating the purchase of a flat screen, consider that with the coming of summer, some of the sharpest near-term price declines may be behind us.

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April 26, 2007

iPhone Hangs Up On Leopard Development

Electronics | Apr 26, 07

In other news of Cupertino, Apple reportedly pulled developers off its new Mac operating system in order to finish development of the iPhone. That new version of OS X, code-named "Leopard" (presumably using the predatory cat moniker to distinguish it from Windows Vista, formerly code-named "Longhorn" as in the cud-chewing bovine) is thus said to have had its release date pushed back to October.

Missed OS launch dates might bring to mind the travails of Vista, whose oft-delayed birth may have foreshadowed a somewhat troubled youth, albeit with decent, if discounted, sales (see "Vista And The Vox Populi," "Vista Achieves Touted "Wow" Effect, Albeit Through Massive Price Drop," and "So I'll Take Vista, And Guess I'll Need More RAM, And Some New Peripherals – Aw, Just Give Me A New System…" ). And indeed, as a colleague of mine quipped, letting the world know all your programmers are preoccupied with what may well be the hottest new product of the coming months would be great cover for slipping the target date on a bug-plagued OS. The iPhone is reported to be slated for release in late June.
However, Apple is in a very different position then Microsoft when it comes to the next generation of its operating system. In a sense, Jobs & Co. are blessed with the strength of the weak, in that Apple's low single digit slice of the market represents a relatively closed ecosystem of peripherals and applications. This make issues of back-compatibility far more tractable, with fewer third parties to accommodate. And if Apple decides not to support a particular legacy technology under the new regime, well, the firm's loyalists have learned to live with some adversity as the price of the Mac's elegance. Indeed, older Mac zealots were hardened under harsher conditions, before web browsing and internet applications indifferent to one's operating system made OS selection less critical. And, of course, it's not like the competition is free of back-compatibility issues.
But the decision to put what seems like maximal effort and resources behind the iPhone may signal the strategic importance of the new product. If Apple is for real in stepping away from digital rights management ("So The Whole Digital Rights Fight Is Over A Lousy Thirty Cents?") and if it is successful in persuading content providers to follow its lead, then a great deal of emphasis is placed on the quality of the Apple hardware/software experience. Further, and in contrast to the firm's paltry OS market share (compared to Windows), the firm enjoys a commanding lead in portable music players. If they can leverage that position into dominance in computing-enabled wireless communication devices, Apple could present a competitive threat to cell phone makers, Blackberry and the already challenged Palm. Indeed, with Mac sales already rising faster than those of the overall PC industry, it's not beyond imagination that an iPhone with Mac OS might produce a stronger catalytic effect on the acceptance of Apple's operating system that the current iPod line has generated.
Of course, it's all in the execution, and for all the difficulty of making the iPhone live up to expectations, it's still possible that it's just a lot easier to turn an iPod into a phone than it is to debug Leopard.

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April 23, 2007

So The Whole Digital Rights Fight Is Over A Lousy Thirty Cents?

Electronics | Apr 23, 07

That's one way of looking at the deal Apple and EMI group recently announced, in which the latter will allow distribution of its music by the iTunes store without Apple's FairPlay or any other digital rights management (DRM) measures. The DRM–free tunes will go for $1.29 per download, a premium of three dimes over the standard $0.99 for a DRM-laden track. Full albums will be sold for the same price as before.

So for an extra $0.30, you get a download that will lack any copy-prevention feature and is said to be playable on most non-iPod players and non-Mac computers. The music is sold in AAC format encoded at 256 Kbps, double the rate of previous iTunes (though this is still far "lower res" than either standard CDs or Audio-DVD).
To be sure, not all of EMI's catalogue may be available under the arrangement (EMI's Beatles tracks will not be included, for example), nor is it clear if other labels will follow suit and cut similar deals with Apple or other download stores (EMI is said to intend to distribute DRM-free through other e-tailers besides iTunes). But this does appear to be a step in the direction I called for in February of this year, in which Apple would offer to sell without DRM for any label or independent artist desiring such distribution (see "How Steve Jobs Could Show He's Sincere About Eliminating DRM"). The initiative also demonstrates Apple's faith in the excellence of its Mac and iPod designs and in the security of the market position of the iTunes store.
Yet perhaps most interesting of all is the fact that this transaction begins the process of pricing the elimination of digital rights management. The thirty cent price tag may represent an acknowledgment by both Apple and EMI um, that the technical and legal environments don't bode well for the long-term elimination of copying and file sharing. Then again, the seemingly modest DRM-free track premium may be telling us something else. It may just be that the level of interest in a lot of the music out there is so low that you practically have to pay someone to share it with a friend. After all, what does the zero premium for a DRM-free album say about the value of the "non-hot" tracks, and the likelihood that anyone would care to share them?

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March 30, 2007

High-Def Disks? We Don't Need No Stinking High-Def Disks!

Electronics | Mar 30, 07

Microsoft's decision not to include an HD-DVD drive in its Xbox 360 Elite isn't good news for Toshiba's high-def standard, nor does it necessarily portend good things for Sony's Blu-ray or Apple TV.

The Elite has a 120 GB hard drive for expanded media storage, and its HDMI interface allows high-def output. But if they want to play HD-DVDs, consumers still have to shell out an extra $190 or so to purchase a separate Xbox 360 HD-DVD drive – see "So Xbox Has A 1080p HD-DVD – Blu-ray's Still A Cooler Name (You Can Tell By The Dropped Vowel)". However, Microsoft's gamers have another high-definition alternative, as they can simply download HD movies via the Xbox Live Video service. The larger hard drive of the Elite should come in handy for this application since high-def is a disk pig, taking up four to five GB per two-hour movie. Perhaps as or more important, note the Xbox 360 Elite can be used as an IPTV set-top box/digital video recorder, so it's conceivable that phone companies could ally with Redmond to use this Xbox to supply HD content and compete with traditional cable firms.
What does this mean for Toshiba, Sony and Apple? One might think Sony would be pleased to see Toshiba's putative HD-DVD partner eschewing a built-in HD-DVD player, but in doing so Microsoft has backed a technology that could threaten all disk-based distribution, including Blu-ray. With the Elite to be priced at under $480, it's still cheaper than the PS3 line, despite its large hard drive. I've argued in this space that, with the PS3's Blu-ray-driven high price, Sony may be sacrificing video game market share in order to promote its high-def standard ("Blu-ray May Avoid Betamax's Fate…Even If The PS3 Isn't So Lucky"). It would be ironic if Sony blew its video game market position to back a type of HD disk only to see the Xbox help to make all HD disk technology less relevant.
As for Cupertino, to be sure, Apple TV at just under $300 is considerably cheaper than the Elite, but of course it does not double as a top of the line game console. Further, Apple does not currently offer high-def downloads.
Needless to say, there will be a response from Microsoft's rivals. Already there's talk of an 80 GB hard drive version of the PS3, and of course Apple can move to HD content at some point. As for Toshiba, in the face of wide content availability in Blu-ray format press reports have it implementing April 1 price cuts for its line of HD-DVD players, down $100 for the HD-A2 and HD-A20 and $200 for the HD-XA2 (these would then list at $399, $499, and $799, though vendors on PriceSCAN.com are already pricing these models at or below the new lists). But with the Elite, Microsoft has undercut not only the PS3's price but the rationale behind the high def models of both Blu-ray and HD-DVD. It's been apparent for a while that HD downloads could negatively impact the high-def disk market, particularly in a world where DRM restricts the ability to record on disk (see "Blu-ray vs. HD-DVD: Lock-In, Co-Existence, Or Irrelevance?"). I'm not saying Microsoft's move or high-def downloads in general eliminate the logic of portable HD media, but neither of Japan's high-definition powerhouses can be very pleased. And with a high-def march stolen on Apple TV, the release of the Elite is not likely welcome news in Cupertino, either.

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March 20, 2007

Blu-ray May Avoid Betamax's Fate…Even If The PS3 Isn't So Lucky

Electronics | Mar 20, 07

Press reports have sales of Sony's Blu-ray high-definition DVDs selling at about twice the rate of Toshiba-backed HD-DVDs over the past two months, yet Sony itself cautions the inclusion of a Blu-ray player in the PS3 could limit the latter's market share.

Why Blu-ray sales are outstripping HD-DVD is a matter of some debate, as is of course whether this situation will persist. Right now Blu-ray is backed by half of the "big eight" studios; three others are putting out content in both formats, with Universal being the only large player solely backing HD-DVD. With the Blu-ray partisans including Fox, Disney and Sony itself, Sony claims that the lion's share of current high-def DVD hits are available exclusively in Blu-ray format.
Yet Sony CEO Howard Stringer has reportedly made remarks to the effect that the cost of Blu-ray functionality in the PS3 is such that any failure of the new model would be attributable to its price point. That price, richer than Microsoft's Xbox 360 and the very successful new Nintendo Wii, reflects the cost of including Blu-ray in the PS3. Stringer still predicts success for the new PlayStatiom, but it's worth noting that even if sales of the PS3 fall short of those of its rival, they still increase Blu-ray market presence and could enhance that standard's competitive position versus HD-DVD (see "PS3 Postmortem?"). This strategy increases in significance to the extent that Microsoft's offering of an HD-DVD add-on for the Xbox 360 aids Toshiba's standard – see "So Xbox Has A 1080p HD-DVD – Blu-ray's Still A Cooler Name (You Can Tell By The Dropped Vowel)".
Interestingly, at least in the player market, it appears some consumers are willing to pay up for Blu-ray. For both standards, as of this writing the lowest-priced players on PriceSCAN.com are also the most popular, these being the Samsung BD-P1000 Blu-ray Player and Toshiba's own HD-D1 HD-DVD Player. Last May, shortly after its introduction, the Samsung was priced at $1,000; it now goes for a little less than $450 (see graph below).

Time Period: 5/8/2006 through 3/12/2007
Each tick mark represents one week
Red = High Price, Blue = Average Price, Green = Low Price

That corresponds to the introductory price of the Toshiba late last year; this HD-DVD model may now be had for less than $280.

Time Period: 11/13/2006 through 3/12/2007
Each tick mark represents one week
Red = High Price, Blue = Average Price, Green = Low Price

If introductory-level Blu-ray players are selling at a premium to HD-DVD, it may be a reflection of greater demand driven by superior content availability in the Blu-ray format. As noted in this blog before (see "Can Wintel Make Blu-ray The Next Betamax?" and "Blue-Ray Vs. HD-DVD: Lock-In, Co-Existence, Or Irrelevance?"), this can lead to a runaway lock-in effect, where greater market penetration by a particular standard incentivizes the release and purchase of more content and hardware conforming to that standard. This can amount to a vicious circle for any rival technology, driving alternate standards into oblivion.
Sony was on the receiving end of this phenomenon when it lost the Betamax-VHS war of two decades ago. Unless Toshiba quickly persuades more studios to release content on HD-DVD and/or its current backers produce more popular fare, Sony may finally have its revenge. Perhaps that scenario could be partially catalyzed by the costly inclusion of Blu-ray in the PS3. Then, even in the face of lost videogame market share, Sony may find victory in the high-def standard war worth the sacrifice.

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March 11, 2007

Are Large Flat Screen Makers And Retailers Taking A Break From Price Cutting Each Other Into Oblivion?

Electronics | Mar 11, 07

Months of intense competition in the flat-panel television market have resulted in sharply lower prices. It now appears that, at least for the moment, prices of the larger sets may have entered a period of relative stability.

Last year, a take no prisoners contest for market share was the inevitable consequence of a plethora of set makers combined with fierce competition between online and physical retailers. The result was a dramatic price drop. Now, however, with a market perhaps constrained by supply and the fundamental costs of manufacture, some kind of equilibrium may have been reached.
Consider the Sharp LC-65D90U AQUOS Widescreen Liquid Crystal Television and the Panasonic TH-65PX600U, the most popular 65-inch LCD and plasma televisions on PriceSCAN.com, respectively. As can be seen from the charts below, each underwent a period of substantial price reduction during 2006, yet over the last few months the rate of decline has diminished significantly, with the low price actually rising at times.

Sharp LC-65D90U AQUOS Widescreen Liquid Crystal Television
Time Period: 12/5/2005 through 3/5/2007
Each tick mark represents one week
Red = High Price, Blue = Average Price, Green = Low Price

Panasonic TH-65PX600U
Time Period: 10/9/2006 through 3/5/2007
Each tick mark represents one week
Red = High Price, Blue = Average Price, Green = Low Price

It's a similar story for many of the larger flat panel televisions.
Innovation and competition being what they are, it's a good bet prices will fall further over time, but it appears that in the near term the big declines may be behind us. This is good news if you've been waiting for large flat screens to find some kind of temporary price floor. Apparently, even in the consumer electronics market, you can't beggar thy neighbor all of the time.

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February 12, 2007

How Steve Jobs Could Show He's Sincere About Eliminating DRM

Electronics | Feb 12, 07

If Apple wants to show it sincerely desires a world without digital rights management (DRM), it could offer to distribute DRM-free downloads right now, for any act or label that wishes to avail itself of that option.

Steve Jobs' recent call for record labels to eliminate DRM on music downloads would undermine a key competitive advantage of CDs, and that may be why many in the music industry are so resistant to the idea. So long as music bought over the Web is saddled with anti-copying software, it remains an inferior product to music purchased on DRM-free CDs. To understand why the labels prefer a CD-based world, you have to go back to the 1970s, when the industry discovered the amazing economies of scale inherent in promoting the albums of a handful of "superstar" acts, particularly in the wake of "Frampton Comes Alive" (the architects of this strategy and their effect on creativity are chronicled in Fredric Dannon's appropriately titled "Hit Men" ). In this model, the album format forces the p