LG Signs Three National Chains for Coupon-Eligible Converter Boxes

LG officials confirmed at a line show here Friday that the company had agreements with three national chains, but didn’t identify them. NTIA is expected to discuss retailer certifications in a briefing Tuesday. Its IBM vendor vowed when it landed the NTIA contract in August to have at least three national chains and five regional or local retailers certified for the program by December.

LG got NTIA certification for the box in October and last month started mass production at its plant in China, company officials said. The boxes, which will retail for $59.99, are currently being shipped to the U.S. and will reach retailers by January, company officials said. Availability of the boxes at retail is critical in NTIA’s decision when to begin mailing coupons to consumers. NTIA said it won’t mail them out until it’s sure consumers will find a reasonable supply of boxes of retail shelves because the coupons expire 90 days after they're mailed. Consumers may begin requesting coupons on Jan. 1.

The boxes will ship as LG launches a renewed effort to position Zenith as an entry-level brand for flat-panel TVs and other products. The Zenith brand appeared at Kmart on Black Friday on a 42W 720p plasma TV and Circuit City has been selling a 50W model at $1,199. Wider distribution of Zenith plasma TVs this fall was constrained by a tight panel supply, Steve McNally, vice president of sales told us. That tight supply forced industry officials to lower forecasts for 2007 U.S. plasma TV sales to 3.2 million units from 4 million at the start of the year, industry officials said. LG is forecasting a 6 percent increase in plasma TV sales in 2008 to 3.4 million, while LCD TVs jump 31 percent to 22.3 million, said Allan Jason, vice president of consumer electronics marketing.

LG first aired plans for a revival of the Zenith brand in April with the hiring of Brendan Morris to head up the effort. Morris left Zenith for a top post at Uniden and former Samsung executive Claude Frank was hired as the new brand director, McNally said. The Zenith brand will be used to compete with Polaroid, Syntax-Brillian, Vizio and other second- and third-tier brands, he said. Zenith will focus on LCD TVs in 2008 in 19W, 26, 32W and 42W screen sizes, McNally said. LG acquired the Zenith brand in buying the company out of bankruptcy protection in 1999.

“We will position that to fight in the marketplace with the more cost-oriented brands,” said Tim Alessi, product development director at LG. “The Zenith brand name still has a lot of awareness and value so we think with the right product and a reasonable price that we can compete with third-tier guys.”

Meanwhile, LG has shipped several thousand units of its second-generation BH200 dual-format player at $999 list, including models that Best Buy has used for about 30 days, Jason said. More plentiful shipments are expected next week, but some Best Buy stores sold the demo models, Alessi said. The BH200 adds HD DVD’s mandatory HDi for interactivity and Internet connectivity for downloading Web-enabled bonus features. Both features were lacking in the first model, the BH100, that LG unveiled at last CES. The last of the BH100s shipped in October, Jason said.

LG will focus in 2008 on dual-format players, not standalone Blu-ray decks, but will keep its options open, company officials said. “At $1,000, it’s not huge volume, but we're looking at future products that will get to closer to” the price of a single-format player, said Aaron Dew, product development manager. LG also continues weighing next-generation DVD recorders, Alessi said. “The technology is available and we have it in the computer drives, but how it gets commercialized for consumer use we'll talk about some time in the near future,” Alessi said.

In plasma, LG introduced eight models, including six 1080p sets. Dropped from last year were a high-end 42W and the 71W set, which suffered slow sales despite a drop in price to $15,000 from $69,000, Alessi said. LG also will field 47W and 52W LCD TVs with built-in 802.11n wireless, company officials said.