Communications: Color TV: Blue

U.S. warehouses and stockrooms are bulging with some 1,300,000 color TV sets that manufacturers and dealers thought would be sold by now. Though sales are 8% ahead of last year, TV makers—excited by two years of bonanza—were caught with their hopes up. Last year supply could hardly catch up with demand: Sales had bounded from 2,700,000 sets in 1965 to 4,700,000 sets worth close to $2.5 billion. The manufacturers counted on pushing sales over the 7,000,000 mark in 1967. Now, estimates have been trimmed by 1,000,000 sets.

“Consumer uncertainty” is the reason for the slump, says Zenith Radio Corp.’s President Joseph S. Wright. Tight money and the threat of increased income tax are listed by others. Even fear of racial riots is a factor. “People aren’t coming out at night to shop,” says the owner of Roxy Electric Center, a retailer in Philadelphia. The continuing high cost of color is undoubtedly the biggest reason. As a sort of reverse proof of this, Philco-Ford, an exception to the general trend, offered a color set for $299, saw first-half sales increase 65% over last year.

Following that lead, other manufacturers are cutting prices on their 1968 models. Motorola has slashed its suggested retail price for a 20-in. table model from $429 to $329 and has introduced a transistorized set for $599, which is some $ 100 below its original estimate. RCA, the largest of the color TV producers with 30% of the market, marked down the original price tags on its new line by $20 to $30, in June, while Zenith broadened its line to include a smaller, less expensive set. G.E., too, is now pushing a “personal portable” table model for $200.

RCA is aso pinning high hopes on a massive “Watch Now, Pay Later” campaign to be launched in mid-August. Customers will be offered the whole range of models, from the $329.95 set to a $1,600 combination radio-phonograph-TV console, with first payment due 90 days after purchase. Virtually all the other makers are expected to fall into line. Says an RCA executive confidently: “I don’t think the public has soured on color TV.”