Published:
11-Jun-08
The price of entry-level Blu-ray Disc (BD) players has fallen below the $300 mark in the US for the first time, with retail giants Wal-Mart and Best Buy both introducing unbranded players at this price point. Wal-Mart is to sell the Japanese Funai Magnovox NB500MG9 a profile 1.1 BD player for $298, making this the lowest cost profile 1.1 player available to date. The retailer is also selling lower priced branded players, Samsung's BD-P1500/XAA and Sony's BDPS300, at $348 and $388 respectively. Fellow big box retailer Best Buy is promoting Insignia's NS-BRDVD profile 1.1 BD player at $350, with an offer that includes a $100 voucher on BD movies from Disney, Touchstone and Miramax, reducing the effective selling price of the unit to just $250.
Meanwhile, as US retailers focus on reducing entry-level price of BD players, the number of higher-priced models coming to market continues to increase both in the US and overseas. Pioneer is to release two Profile 1.1 BD players in the US mid 2008: the BDP-51FD and the Elite BDP-05FD will be priced at $600 and $800 respectively. Also in mid 2008, Panasonic is to release one of the first Profile 2.0 players in Europe and the US. The Panasonic DMP-BD50 is expected to be priced at $700 in the US; no price has yet been confirmed for Europe. Then in late 2008, a subsidiary of Chinese Sumpo Group is scheduled to launch a 'no-name' BD player in Australia - the Olin-branded player will be Profile 1.1 compatible and priced at A$499 ($480).
Our take...
These models and others will give consumers the choice of internet connectivity (Profile 2.0) or not (Profile 1.1), high-end or entry-level machines, and enable the market to build on the apparently disappointing sales recently reported by the NPD Group. Research from the group suggests a 40% decline in BD player sales in February (the month after Warner dropped HD DVD) and only a 2% increase in March (the month Toshiba withdrew HD DVD). Screen Digest analysis of early DVD sales data in the US and UK suggests that a drop-off in sales in February is not uncommon for hardware, even during the early years of growth. The marginal increase in March is arguably more significant, although it may also reflect the limited stock held by retailers (i.e. enough to satisfy perceived first-quarter demand prior to the conclusion of the format war, but not a sudden upturn in sales in a single-format world). Also, many of the higher specification machines announced at January's CES show had yet to be released. The speed at which the format war concluded understandably took many CE manufacturers by surprise and it has taken time for production to catch up. The real test will be what happens to sales of BD players over the next few months.
Certainly, many retail analysts consider $300 and $200 to be key price points for hardware purchasing among mass market consumers. Screen Digest's analysis of the take-up of standard DVD shows a clear correlation between hardware prices and the format's move to mass market. Although in the four years it took that format to reach these prices it could be argued that the upturn also reflected high consumer awareness and four years of consumer advocacy, which is not yet the case for BD. However, the introduction of players below the $300 mark and the promise of sub-$200 machines from the newly-licensed Chinese brands later in 2008 and early 2009 can only have a positive affect on adoption rates. Screen Digest forecasts, which include provision for such price declines, anticipate an installed base of 4.8m standalone BD players worldwide by end of 2008 although this figure will still be dwarfed by the number of PlayStation 3 households.
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