August 18, 2004 1:15 PM PDT

Sears launches consumer electronics line

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Sears is creating its own line of consumer electronics in an effort to ride the digital wave.

The Hoffman Estates, Ill.-based retailer has started to sell its own Veos brand of projection televisions on its Web site. The 65-inch-screen TVs will start to appear in the company's stores in the fall, according to sources. DVD and other devices will follow.

Developing and marketing an in-house line of electronics appears to be part of an overall strategy to try to sell more electronic entertainment items. In March, Sears stopped selling PCs and film cameras to free up shelf space for digital cameras, DVDs and software.

In June, the company announced it had named Tasso Koken vice president and general merchandise manager of home electronics. Koken is an electronics retailing veteran who had once worked at a chain called The Wiz.

Veos is a trademark of Sears, according to the company's Web site. A Sears representative could not immediately comment on the company's overall strategy.

Like many "brand" manufacturers, Sears doesn't actually make TVs but gets them from other companies. The source in this case is Brillian, a Tempe, Ariz.-based company that specializes in Liquid Crystal on Silicon, or LCOS, devices. These devices--which include semiconductors, a mirror, and a layer of liquid crystal--serve as projectors for large screen projection TVs.

While primarily a semiconductor maker, Brillian started to assemble TVs for retailers and "brand" manufacturers as a way to build a market for its chips. Sears is its first customer, but the company is negotiating with a number of Japanese manufacturers, said Vincent Sollitto, Brillian's CEO.

Projection TVs "have three times the semiconductor content of a PC, and there is lots of growth," he said. "Everyone wants a piece of the action."

The first Veos TV isn't cheap, selling for $7,999, $4,000 more than a 60-inch Hitachi rear-projection TV that Sears also sells. Brillian currently sells its TVs to its industrial customers for about $4,000, but the price will drop as volume picks up, Sollitto said.

LCOS, he added, can provide better picture quality than projection TVs built around Digital Light Processors, a contention DLP supporters such as Texas Instruments and Samsung deny. LCOS adoption has been hampered in the past by some of the difficulties in making the chips. This week, Intel delayed its first LCOS.

Sears isn't the only decades-old company getting into fancy TVs. Westinghouse and Polaroid have also hatched TV plans. Over the years, Sears has promoted, often very successfully, in-house brands such as Craftsman.

This year, Wal-Mart started to expand floor space for electronics.

 

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