Banyo High Definition Television (HDTV) Market Analysis
The company Banyo is interested in finding out more about the possible adoption process of High Definition Televisions (HDTVs). A market analysis is to be accomplish with a forecast of the demand for HDTV from period 1992 to 2006.
HDTV Background
High-definition television (HDTV) is a television broadcasting system with a significantly higher resolution than traditional formats allow. This technology was first introduced in the USA during the 1990s, by the Digital Grand Alliance (1995).
HDTV is the biggest breakthrough in broadcasting since color TV. It offers wider pictures with greater detail and the clarity of motion pictures. Compared to standard television (NTSC), the true HDTV image has twice the luminance definition – vertically and horizontally – and is twenty-five percent wider. Standard television aspect ratio is 4:3 (four units wide, three units high) – the HDTV aspect ratio is 16:9. The 16:9 ratio is much closer to the average wide-screen image shown in movie theaters. The biggest difference, and the greatest appeal of HDTV, is its clarity. True HDTV pictures are composed of 1080 active lines (1125 total) whereas current standard television pictures are composed of only 486 active lines (525 total). While it is possible to see the lines that make up standard television pictures, HDTV lines are not at all noticeable. The fine-grained HD picture contains five times more information than does the standard television picture and is accompanied by multi-channel, CD quality sound. The difference in video and sound quality is dramatic.
High-definition television (HDTV) offers a much better picture quality than standard television. HD’s greater clarity means the picture on screen is less blurred and less fuzzy. HD also brings other benefits – smoother motion, richer and more natural colors, surround sound and the chance for different equipment to work better together.
Pessimistic Scenarios
Pessimistic scenarios emphasize potential negative implications on the introduction of High Definition Television in the US. Japan’s previous experience with its aggressive promotion of HDTV standard for analogue systems indicates substantial risks involved: a premature bet on a standard that fails to succeed could very well produce a negative lock-in effect.
In addition, the US economy decline would adversely affect the sales of HDTV in the US. People having no confident with the presidential elections would likely to cause a decline in the economy. As a result a decline in the economy also would happen. When there is an economy decline, people are usually to spend less. People would spend wisely with what is more important than on HDTV.
In some ways government limitations like taxes could further decline the market performance of the introduction of HDTV since there would be less numbers of the product available for the market. Without the support also of the US government could lead to disastrous results of the introduction of HDTV in the US. Moreover, broadcasting companies may not be willing to invest on new technology. US consumers also are uninterested with purchasing HDTV.
Average Scenarios
US consumers accepted the new technology being introduced and there is a running change of old TV set to HDTV initially replacing the televisions set. In addition, US Congress considers the introduction of HDTV in the US market.
Optimistic Scenarios
Nearly half of all consumers plan to make their next television purchase a high-definition (HDTV) television set, according to a new consumer survey released by the Consumer Electronics Association (CEA) today. Consumers are looking for more quality entertainment which HDTV has answered.
Following the introduction of HDTV to the film industry, interest began to build in developing an HDTV system for commercial broadcasting. Such a system would have roughly double the number of vertical lines and horizontal lines when compared to conventional systems.
Government support such as funding to the manufacturer and the broadcast companies would boost the acceptance of the HDTV since companies are willing to invest due to government support.
Forecast
Assumption
Scenario I – Pessimistic
People not willing to buy during launching, therefore p is low and at the mean time, q is low as there is no reference group.
p 0.041
q 0.102
N 98
Scenario II – Average
p 0.059
q 0.146
N 98
Scenario III – Optimistic
People buy based on their knowledge and they prefer a better quality of TV to watch the program. Therefore, p is higher than average.
p 0.077
q 0.146
N 98
Time
Theoretical
Time
Pess
Ave
Optimis
Observed
Forecasts
N
p
q
p
q
p
q
N
Pess
Ave
Optimis
1965
87.2703606
1992
0.041
0.102
0.059
0.146
0.077
0.146
80
3.28000952
4.72001357
6.16001076
1966
125.139266
3
0.041
0.102
0.059
0.146
0.077
0.146
115
4.71500461
6.78500657
8.85500521
1967
164.727037
4
0.041
0.102
0.059
0.146
0.077
0.146
170
6.97000211
10.030003
13.0900024
1968
190.407646
5
0.041
0.102
0.059
0.146
0.077
0.146
190
7.79000169
11.2100024
14.6300019
1969
182.661433
6
0.041
0.102
0.059
0.146
0.077
0.146
185
7.58500178
10.9150025
14.245002
1970
137.509386
7
0.041
0.102
0.059
0.146
0.077
0.146
125
5.1250039
7.37500556
9.62500441
1971
79.1481686
8
0.041
0.102
0.059
0.146
0.077
0.146
75
3.07501083
4.42501544
5.77501224
1972
36.0643194
9
0.041
0.102
0.059
0.146
0.077
0.146
40
1.64003803
2.36005418
3.08004297
1973
14.1329353
2000
0.041
0.102
0.059
0.146
0.077
0.146
20
0.82015172
1.18021591
1.54017124
1974
5.14573587
1
0.041
0.102
0.059
0.146
0.077
0.146
8
0.32894097
0.47333457
0.61705845
1975
1.81862594
2
0.041
0.102
0.059
0.146
0.077
0.146
5
0.20739022
0.29837838
0.38767941
1976
0.63573497
3
0.041
0.102
0.059
0.146
0.077
0.146
4
0.16771528
0.24123903
0.31215509
1977
0.22136945
4
0.041
0.102
0.059
0.146
0.077
0.146
3
0.12954733
0.18619622
0.23829356
1978
0.07697809
5
0.041
0.102
0.059
0.146
0.077
0.146
2
0.09647225
0.13816225
0.16999075
1979
0.02675533
2006
0.041
0.102
0.059
0.146
0.077
0.146
1
0.095778
0.133298
0.135926
The observed N is derived from bass solver.xls computation while results of the pessimistic (pess), average (ave) and optimistic (optimis) are calculated on the formula = (pN)+(q-p)*(N-q)/(N(N)^2). As shown in the graphical illustration below, the computations are in accordance with bass diffusion model with optimistic economic scenarios deriving the higher sales position due to positive economic support to the HDTV innovation.
Credit:ivythesis.typepad.com
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