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Best Buy Co., Inc. (BBY) Stock Set to Flame Out in Ultra-High Def

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Can electronics retailer Best Buy Co., Inc. (NYSE:BBY) really keep its stock afloat by focusing on a niche market like ultra-high-definition TVs? You’d think it would have learned after the debacle that was 3-D TV, but it seems it’s following the same script when it comes to the next next-gen advance in big small-screen viewing.

As my colleague Tim Beyers noted last year, despite its faltering initial footsteps, the ones that seemed to herald the decline in Best Buy Co., Inc. (NYSE:BBY), 3-D TV is on its way regardless of whether we think it’s worth it or not. According to the market researchers at NPD Group, 3-D is set to pop out at you at an astonishing rate between now and 2019, growing from 25 million sets in 2011 to 180 million in another six year’s time.

I’m not so sure that will actually happen, since it was pointed out earlier this year that at the 2013 Consumer Electronics Show, 3-D TV’s were all but absent from the show floor, replaced instead by the ultra-hi-defs of 4K TVs.

Best Buy Co., Inc. (NYSE:BBY)What’s 4K? Well, they’ve got a gazillion pixels in them (almost 8.3 million, to be more exact), four times as many as today’s 1080p sets, with large-screen formats of 55 inches and up. They also carry an equally large price tag. Although the sets Sony Corporation (ADR) (NYSE:SNE) unveiled at CES sported price tags around $25,000, Best Buy Co., Inc. (NYSE:BBY) will carry sets from the manufacturer with bargain-basement pricing starting below $5,000. While they’ll also be available at small chains like hhgregg, Inc. (NYSE:HGG) and regional shops such as P.C. Richards & Sons, Best Buy is the only national chain carrying its sets.

Part of the reason Sony Corporation (ADR) (NYSE:SNE) chose Best Buy Co., Inc. (NYSE:BBY) was because of the employee training the company invested in as a way to differentiate itself from the online competition and to dull the impact of “showrooming.”

So the retailer has a bit of exclusivity that could give it a leg up on everyone else — except that there’s no reason to buy a 4K TV; certainly not at $25,000 and not even at $5,000. The thinking that “if you build it, they will come” was what doomed 3-D TV. There’s hardly enough eye-popping content available to justify the price tags of those sets — let alone quality content — and with 4K sets, there’s zero programming. You’re essentially buying a big honkin’ expensive TV and hoping content providers will come through.

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