Monday, November 13, 2006

Wal-Mart & Best Buy: Aggressive Electronics Pricing Should Spur Satellite Radio Subscriptions

Satellite Radio, like cell phone service, is not about the profit on the hardware, it's about selling the service...the recurring income stream. Cellular providers learned long ago that it made financial sense to give away the handsets to attract subscibers. Printer manufacturers do the same...sell the equipment at or below cost to get the revenue stream from the printer ink.

Wal-Mart recently announced an aggressive pricing strategy for electronics, with Best Buy is following their lead. Circuit City, Radio Shack and others will most likely do the same. This is expected to boost sales of satellite radio hardware, and should give a jolt to Q4 subscibers additions.

www.briefing.com, Live In Play, 13-Nov-06, 08:32
BBY Best Buy: Pressuring vendors to suspend minimum average pricing, unprecedented - BofA (52.31 ) -Update-
BofA learned BBY is pressuring vendors to suspend minimum average pricing for several days prior to Thanksgiving, which is unprecedented. They question whether the high inventory position at the end of Q3, or aggressive pricing by WMT could be the reason behind this move.