I think you are over estimating the number of hdtv sets that will be in homes in 18 months. The majority in the US get tv by satellite or cable, and are not effected at all by the demise of OTA analog broadcasting. I get mine from DirecTv, including all of my local channels; the only time I ever use OTA is if srvice goes out.
My guess is that 35-40 million new TVs (Edit: all TVs, not just HDTV) are sold per year in the USA, and Neilson estimates the total number of television households within the U.S. (including Alaska and Hawaii) at 111.4 million as of Jan 2007.
Simplistically, that's very roughly 1 new set for every 4 households...or crudely, a new TV set for every household every 4 years. This would suggest that halfway through 4 years (ie, 24 months), each household would be "halfway"...eg, at 50% market share. Since we're already a leg up in adoption, it would make sense if we hit 50% somewhat sooner...eg, the 20 months from now until the NTSC cutoff date.
From
this 2004 source, they were expecting 37 million homes to be HD by 2008; which is roughly 33% (as per above Neilson market size estimate).
A year later,
this 2005 source predicted a 55%-82% penetration rate by the end of 2010.
Their timelines do differ, but it does suggest at a growth rate of 10%+/year.
LRG published "HDTV 2006: Consumer Awareness, Interest and Ownership", which cited the installed base as roughly 1 in 6 (17%) as of early 2006 when the report was done.
Simplistically, adding 10%/year to this, it would hit 50% in mid-2009
But 1Q06 sales of HDTVs were double (101%) of the prior year, so its unclear to what degree this was being captured by LRG and earlier trend projectors. Because the FCC has finally eliminated the adoption ambiguities and all TVs made today now must have ATSC tuners, in conjunction with lower prices and growth in consumer awareness/interest, I find it very hard to believe that the rate of adoption is going to remain as low as only 10% per year...most consumers buying a digital TV today are probably doing to make the jump, and at 75% of all new sales, market adoption rates would probably go up to 15-20% per year, which if we use that for just the next 18-20 months would result in market penetration of approx 45% (IMO close enough!).
And do keep in mind two things:
First, a household only needs to have one HDTV to be a market opportunity - - it is not that Apple needs 100% of all of the TV's in every home to be HDTV to sell an
TV
Second, its generally more affluent households who buy toys such as this, and the
statistics on HDTV market penetration by income suggest that the "17%" share number previously mentioned was for the $50-75K income range, with each the two tiers above each adding very roughly another 10% (to 25% & 38%)...as such, it would not be surprising to see the top ($100K+) tier break 50% this year and the next to follow within 12 months (ie, by the end of 2008).
But overall, I'm just one more guy throwing darts at the wall and making guesses.
I do think that there's going to be some degree of "pain", particularly amongst lower income levels, which very well may be a large portion of the 20% of households that don't have cable/sat subscriptions.
For those few that need it, the feds are subsidizing the necessary tuners, so they are (mostly) free.
FWIW, I've heard this bit about the Feds subsidies before, but I've not seen any actual information on it. Have you seen anything useful?
-hh
