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Super Bowl Increases TV Buying

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Super Bowl XL is causing an amazing rise in TV sales.

While shopping for most consumer electronics peaks around Christmas time, the Super Bowl on Feb. 5 sends the holiday season into overtime for TVs.

Sales of the 10 best-selling models of televisions in January 2005 were $875.9 million, higher than 8 of the 11 preceding months, according to data from the NPD Group, Inc. And analysts say many sports-related TV sales are made in December right after Christmas.

George Creighton, operations manager for a Circuit City store in Rockville, Md., says it's not uncommon for shoppers to wait until game day. On the morning of Dec. 18, when the Redskins played the rival Dallas Cowboys, his store sold three high-end TVs to people who wanted a better set for the game.

Because big sporting events are often the main reason people buy high-def televisions, retailers heavily promote TVs during January, said Eric Haruki, an analyst at IDC.

Microsoft Corp.'s new video game console, the Xbox 360, displays games in high definition, and Sony Corp.'s Playstation 3 will, too, when it goes on sale later this year.

Analysts differ on how much the video game consoles influence sales, though Microsoft Chairman Bill Gates asserted last week that nine out of 10 Xbox 360 owners have a high-definition television or plan to get one.

Falling prices are helping, too. Thirty to 34-inch LCD TVs sold for an average of $2,379 this time last year. That has dropped to $1,566 now, said Semenza of iSuppli. TV shoppers can thank innovations from Asian manufacturers.

Though ongoing pricing wars have cut retail prices and gross margins to levels lower than vendors would like, the TVs are still not cheap.

The big discount stores generally offer bare-bones service - you pretty much walk in and pick out the TV you want. Best Buy and Circuit City Stores Inc. sell installation packages, and increasingly those extra services help to drive profits. That's fine with them.

Upstart TV brands now fight for shelf space with established makers like Sony and Samsung Electronics Co. Some familiar names like Zenith and RCA have been bought by companies that slap those brands on Asian-built TVs. Semenza said 88 percent of TVs sold worldwide are built in Asia.

Shoppers are seeing new brands, too, such as Vizio TVs from V Inc. The company's headquarters are in California but like most sellers its TVs come from overseas. Haruki said V Inc. jump-started its Vizio brand by selling through Costco. Costco margins are thin but Vizio gained a national footprint quickly, he said. Vizio TVs are now sold at several other retailers as well.

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