Calls on Retailers to Help Educate Consumers About DTV Transition During PARA Management Conference Keynote Arlington, Va., May 8, 2006 - Sales of digital televisions (DTV) grew more than 100 percent during the first quarter of 2006, announced Consumer Electronics Association (CEA®) President and CEO Gary Shapiro during his keynote Saturday at the 2006 PARA Management Conference. Shapiro addressed specialty audio-video dealers attending the conference held in Hilton Head, S.C., May 3-7, 2006. According to new figures released by CEA, the industry sold 3.4 million DTV units during the first quarter of 2006, equaling a 101 percent increase in unit sales over the same time last year, and $3.6 billion in dollar sales. Unit sales of flat panel displays also rose dramatically during the first quarter with a 201 percent jump, bringing to life the findings of a recent CEA survey which showed that 49 percent of consumers say their next television purchase will be some type of flat panel technology. "More than 35 million DTV units now have now been sold since market introduction in 1998," said Shapiro in his keynote. "These figures demonstrate that consumers continue to embrace this exciting new technology as we move apace to the end of analog broadcasting. We thank specialty retailers for their leading role in driving this unprecedented transition. "Yet, even as we celebrate our successes, we have much work to do to make sure all consumers weather this transition smoothly. Specifically, we must work together to ensure that consumers have accurate, easy-to-comprehend information about all aspects of the transition." Shapiro outlined CEA's wealth of voluntary, award-winning educational and promotional initiatives including websites, printed collateral and media outreach. CEA currently operates four websites focusing on consumer and dealer education: www.antennaweb.org, www.myceknowhow.com, www.CEAconnectionsguide.com, and www.CE.org/hdtv. CEA also provides resources to help train and provide the latest information to retailers who are on the front lines with consumers. These resources include www.CEknowhow.com and downloadable and reproducible tip sheets, brochures and point-of-purchase materials. Shapiro concluded by calling on each of the retailers to join the effort to inform and educate consumers. "Our industry has a responsibility to provide helpful and accurate information to consumers," he stated. "We urge retailers - as well as manufacturers, government agencies and other industries - to look to CEA as a resource for DTV information. At the same time, we pledge that we will continue to take the lead on a number of fronts to ensure this historic transition remains consumer-friendly." In a related story IMS Research said that HD is taking over the DVR market, a product which is just now being seen with some trends beginning to emerge. While still early in its growth stage, the research company has observed a shift from standard definition (SD) DVRs to high definition (HD) DVRs, particularly in the US. The company is estimating that HD DVRs made up 29% of the total worldwide shipments in 2005, and is forecasting this to grow to 54% by 2010. The fastest growth of HD DVRs is in the US. US shipments of HD DVRs in 2005 were estimated to be 36% of all DVR shipments. Why is this happening? IMS offers that the HD DVR provides a smooth transition from regular programming to HDTV, without a future truck roll and without customers being required to exchange boxes on their own. "This will save the operator money and keep from inconveniencing the customer." Operators are looking ahead to increasing ARPU from each household. Providing additional services to existing customers is less costly than bringing in new customers. "While the transition from SD DVRs to HD DVRs will be most apparent in the US, it will likely occur in other regions as well," states Jack Mayo analyst at IMS Research. "For example, European users have been more likely to purchase a SD DVR, however, as operator deployments increase and HD services become more prevalent this will begin to change." In the second edition of the study The Worldwide Market for Digital Video Recorders, IMS Research provides a comprehensive look at all the major markets for DVR. HDTV pioneer and analyst, Dale Cripps of HDTV Magazine, predicts that the HD PVR will increasingly take market share away from the pre-recorded high-def DVD when an expansion of wideband VOD use occurs. The future introduction of holographic mass storage for secure archiving adds to DVD woes. Despite endorsements by all of the content producers and high-def DVD player manufacturers both high-def pre-recorded formats have been struggling to get off the ground. The market apathy is in part due to two competing formats being introduced simultaneously. Neither offers enough compelling or sought-after distinctions for the public to care about. The consumers are both angered and confused by it. "It's only a matter of a short time," Cripps adds, "before pre-recorded media is seen as out-of-date by a significant number."