Weekly television digest (Jan-Dec 1960)

VOL. 16: No. 48 17 more about ,/ EIA WINTER MEETING: Discussion of FCC’s proposed TV-set-control law may be the most significant topic at EIA’s board session and the meeting of its consumerproducts div. executive committee (see p. 1) . But there may be several other important actions taken in the consumer electronics sphere at EIA’s Nov. 29-Dec. 1 winter conference in San F rancisco. The consumer-products committee will consider 2 projects— both developed & pushed by its chairman, Motorola’s Edward R. Taylor. It will receive, and possibly vote on, a draft of the proposed TV-radio-phono ad-practices code, patterned after that of the American Home Laundry Assn. (Vol. 16:38 p6). Whether this industry-enforced code ever reaches fruition may well depend on intei-pretations by EIA and member company attorneys on its legality. Also submitted to the committee will be a proposal for a consumer-electronics promotion campaign — aimed at getting the public to buy more TVs, radios & phonos. This is the latest version of several proposed drives in TV & stereo fields, which failed to get committee approval. Electronic product imports will also feature prominently on the EIA agenda and in corridor discussions, as usual. One new item due for action will be a proposal by EIA’s tube & semiconductor div. that FTC be asked to reopen the TV-Radio Trade Practice Conference proceedings and insert a rule requiring the marking of sets containing imported components. Speaking on microminiaturization, deputy research dir. Edward G. Witting of the Office of the Secy, of Defense will address the Nov. 30 luncheon. In addition to all-channel receiver legislation and the import problem EIA’s board of directors is expected to consider military procurement procedures, patent policies, and minimum wage laws. Electronic component shipments leveled off in the 2nd quarter this year from their first-quarter plateau, the Commerce Dept.’s Business & Defense Services Administration reported. Counterbalancing declines in output of receiving tubes, transistors, capacitors and connectors were increases in diodes & rectifiers, power & special purpose tubes, TV picture tubes, transformers and quartz crystals. For the first time since BDSA started collecting the data, shipments of semi-conductors failed to go up during quarter. Record factory sales of transistors in September set a monthly high with 13 million units at $28.4 million, reports EIA. The sales spurt — up 3.2-million transistors & $5.7 million over August — also pushed the 9-month totals ahead of the 12-month record unit-&-dollar volume established in 1959. The 9-month volume climbed to 90.3-million units, vs. 82.3 million for all of 1959. Dollar volume increased slightly to $222.2 million from $222 million, reflecting decreasing transistor prices. The EIA’s monthly figures on factory sales of transistors: I960 1959 Units Dollars Units Dollars January 9,606,630 . $24,714,680 6,196,317 $13,243,224 February 9,627,662 24,831,670 6,393,377 14,660,056 March 12,021,606 28,700,129 6,310.286 18,117,560 April 9,891,236 23,198,676 6,906,736 16,864,049 May 9,046,237 24,714,680 6,358,097 19,007,293 June 10,392,412 27,341,733 6,934,213 18,031,693 July 7,070,884 18,083,802 6,0.30,266 16,618,316 August 9,732,99:1 22,739,969 7,129,696 18,054,138 September ... ... 12,973,792 28,442,229 8,662,626 20,851,290 TOTAL ... 90,263,362 S222.198.961 57,910,513 $154,337,518 SALES & INVENTORIES DOWN: Retail TV sales took another tumble in October, preliminary estimates showed last week, confirming reports from industry leaders previously printed in these columns. There were silver linings in October, though: (1) TV production cutbacks finally brought inventories below last year’s level. (2) Radio at retail showed a nearly phenomenal rise. Sales of TV sets to consumers were down 16% from Oct. 1959 — about 550,000 vs. 637,147 — biggest monthly percentage drop yet. For the year’s first 10 months, however, cumulative retail sales were still about 5% ahead of last year — 4,650,000 vs. 4,449,000 sets. TV sales by distributors to dealers took another sharp drop — about 30% — to 545,000 in October this year from 716,000 in Oct. 1959. Total year-to-date distributor sales are 4,583,000 — down from last year’s 10-month figure of 4,865,000. Cumulative 10-month TV production was 4,872,844, well below the 5,195,440 for the same 1959 period. As a result of the sharp break on production, total inventories of TV sets in all distribution channels fell below 1959’s level at the end of October — 2,272,000 vs. 2,331,000. Although the drop is only 2%, the pattern of these inventories gives sharp indication that retailers prefer to go into the Christmas season with far lower inventories than last year, relying on distributor & factory stocks if demand becomes strong — rather than carrying their own heavy supply of sets. As compared with Oct. 31 last year, retail TV inventories declined 19% to 930,000 from 1,149,000. This was the only level at which TV inventories dropped, but the dip was large enough to pull the industry-wide inventory level down. Distributor inventories were up to 848,000 from 809.000 last year and factory stocks were 494,000 vs. 373,000 in 1959. The radio picture was cheery, October seeing a 25% rise in dealer sales of home radios over last year (1,050,000 vs. 839,000 in Oct. 1959). This sales increase was entirely from inventory, since home-radio production for October was actually lower than in the year before (1,072,000 vs. 1,264,000). But 10-month radio production totaled 8,699,318, nearly 660,000 units higher than last year’s 8,040,008. Distributor radio sales in October totaled 1,170,000, up substantially from 931,000 in October last year. Year-todate distributor sales were 7,646,000 vs. 6,911,000. Nevertheless, and despite the inventory reduction through heavy sales & curtailed production, total radio inventories were still higher than a year ago — 4,936,000 vs. 4,601,000. Only distributor inventories were lower than last year. Here’s the Oct. 31 home-radio inventory lineup (1959 figures in parentheses): factory, 996,000 (624,000); distributor, 1, 765.000 (1,905,000); retail, 2,175,000 (2,072,000). New plants & expansions: Sylvania will begin construction in April of a 17,000-sq.-ft. addition (for a total 53,000 sq. ft.) to its Hillsboro, N.H. semiconductor plant. • GE has announced plans for a major expansion & renovation of its California Ave. electronics plant in Palo Alto, Cal. Included is the construction of an 8,000-sq.-ft. single-story addition, slated to get under way in December. • IBM has purchased a $1. 6-million tract in downtown Philadelphia for the site of a $10-million skyscrapei’ ortioe building. • (k>llin.s Radio will begin coM.structioii Dec. 15 of a $1 .8-million, 117,()00-sq.-ft. production plant on a 200-acre site at Richardson, Tex. Slated to be ready Aug. 15, it will be built by Collins’ Alpha of Tex. subsidiary.