Mystery of missing Pace boxes

ANOTHER month, another profits warning. Pace Micro has told investors that it is slashing its sales forecasts on the £99 set-top gadget that allows access to Britain's 20 free digital TV channels.

'While the company previously indicated it could sell 100,000 units by the end of May, supply has been prudently constrained to around half of this level due to the current uncertainties that surround digital terrestrial TV services,' said Pace as it delivered its second profits warning in seven weeks.

It had previously expected to make a profit in the six months to the beginning of June, but now says it is heading for a small loss.

The 'current uncertainties' refer to ITV Digital, the venture jointly owned by Granada and Carlton that is now in administration.

But what Pace failed to mention is that the 'free-to- air' channels received by the £99 box have nothing to do with ITV Digital.

And a nationwide survey by Financial Mail has found that instead of consumer nervousness holding back demand for Pace's new device, the reason is far simpler - the boxes are difficult to find in the shops.

Dixons said it is operating a 'pre-order' policy. Customers must put down a £10 deposit and then wait weeks for a box to arrive. Currys, meanwhile, recommended Dixons.

'It is in very short supply,' said a sales assistant at Dixons in Norwich. 'We have been getting batches of five to ten units, but that's all. It will take us up to a month to fulfil our 30 existing orders.'

And at Comet, the company said it was taking orders for the gadgets and expected supplies to arrive soon.

Andrew Wallace, Pace's marketing director, defended the company's decision to restrict supply. He said: 'We have to make sure that we match the demand so that we are not faced with left-over boxes. We judged 50,000 would do the trick. We will review that.'

The Government had hoped the no-frills box would appeal to viewers who have so far refused to sign up to digital TV subscriptions, boosting the uptake of digital television. This is at present received by only about 40% of households.