Posted on 08/15/2005 11:02:09 AM PDT by nypokerface
SAN FRANCISCO - Prices for flat-panel televisions have finally begun to tumble — by as much as 35 percent in the past year — as soaring demand for the two leading flat-panel technologies, plasma and liquid crystal display, or LCD, attracts a host of new competitors.
Lesser-known brands, such as Westinghouse Electric Co., Regent USA's Maxent, Syntax Corp.'s Olevia and Norcent Micro Inc. are slashing prices to compete against more-established names like Sharp Corp. and Sony Corp., forcing them, in turn, to charge less.
Semiconductors and other TV components also are getting cheaper, and the industry continues to find ways to trim production costs.
Now, a 42-inch liquid crystal model retails for about $4,200 on average, and the same-sized high-definition plasma sells for around $2,900, said Riddhi Patel, senior analyst for iSuppli, a market research firm in El Segundo, Calif.
Still too expensive? Price-conscious consumers shouldn't worry, analysts say, as flat-panel prices have yet to bottom out.
Some major retail chains continue to charge a premium for plasma and liquid crystal sets, pocketing 25 percent profits on larger models, Patel said.
"There is plenty of room for retailers to squeeze more out of their profit margins and attract customers," she said.
Proof that flat-panel TVs is a boon for retailers can be found in their earnings statements. Best Buy Co. saw an 85 percent jump in first-quarter profits due in part to skyrocketing sales of flat-panel televisions, while struggling electronics retailer Circuit City Stores Inc. saw triple-digit increases.
Representatives for Best Buy, Wal-Mart Stores Inc. and Costco Wholesale Corp., did not respond to requests for comment, while Bill Cimino of Circuit City refused to discuss profit margins, though he did say more price reductions are expected.
The price war, meanwhile, is taking a toll on flat-panel manufacturers. Sony blamed increased competition from Asian manufacturers who produce cheaper goods, including flat-panels TVs, when it reduced its full-year forecast by 90 percent. Last month, Sony, Toshiba Corp., and Hitachi Ltd. reported quarterly losses.
Some manufacturers have agreed to share risk and expense. Hitachi and Matsushita Electric Industrial Co., the maker of Panasonic televisions, began jointly making LCD televisions in February, as did Sharp and Fujitsu Ltd.
Despite the competitive environment, the companies continue to invest heavily in flat panels knowing that once the market matures they stand to cash in.
About 20.8 million flat-panel TVs will be sold this year worldwide, almost double the 10.9 million units sold in 2004. Sales next year should rise 47 percent, iSuppli said.
Though CRTs have served consumers well for a half-century, flat panels are appealing because they take less space and can be hung on walls.
Misperception may also play a role.
When it comes to picture, most analysts say CRTs are just as good as flat panels, yet many consumers are under the assumption that flat panels are all high definition and thus offer better picture quality. In retail showrooms, flat panels typically display high-definition digital content, so they look superior to CRTs.
Consumers don't always know that some flat panels can't receive high definition, or that CRTs can be formatted to get such programming.
When it comes to performance among flat-panel makers, paying more doesn't necessarily mean a better picture, said Eric Haruki, an analyst for research firm IDC.
More than 90 percent of the world's LCD panels are supplied by five companies, so top-tier brands and generics often share the same components, according to Haruki.
"Some of these companies buy top-notch components from the big players and rebrand them," Haruki said. "The technology is pretty good across the board."
Greg Gudorf, Sony's vice president of television marketing, insists top-tier manufacturers have an expertise lesser-known brands can't match.
"What is their manufacturing expertise in processing video signals?" Gudorf asked. "That's where Sony's heritage comes in. We know how to make a picture look good."
But James Li, chief executive of Syntax, argues that heritage is meaningless when it comes to new technology.
"We all entered the LCD era on the same playing field," he said. "Everybody is working with the same technology. Consumers have already learned that the brand name is not the single most important factor in their purchase."
There is just as much debate over whether to buy now or wait until prices drop further.
Patel is in the market for a new television, but she is waiting until after holiday shopping peaks. She said retailers are apt to offer their best deals then.
Russ Johnston, senior vice president of marketing for Pioneer Electronics Inc., agrees the cost-conscious can wait.
But for those who want the best TV experience in time for the upcoming football season and baseball playoffs, there's no better time to buy.
"If you look at August through November, those are the best TV months," Johnston said. "Sports fans are going to invite people over and want to show off their new TV. They're done waiting."
Just in time to watch the Chiefs, huh? :0)
(Denny Crane: "Sometimes you can only look for answers from God and failing that... and Fox News".)
Stick with rear projection DLP or JVC's system when they get 1080p for under $3000, which will be probably early next year.
Awesome sets.
My husband has always been one of those, "wait awhile, the price will come down" shoppers. I'm of the "I don't go to shop, I go to buy" school of thought. Needless to say, we don't shop together very often, but last November we did, to Best Buy, he to "shop", me to "buy".
Thankfully, there was a huge Samsung flat tv sale going on, Honey could feel like he'd saved a ton of money, and I could "buy" what our son-in-law declared to be the best.
So..........since then, Honey and I have enjoyed the heck out of what we call, our best purchase ever. We even switched from DISH satellite to COMCAST Cable because cable offfered many more HD channels.
That TV looks like the one my folks had when I was a kid. When the "test pattern" wasn't on, there were kids' shows like Space Patrol and Time for Beany. :^)
Plasmas only really last about 5 years before degradation of the picture starts. Eventually, you have to replace it, compared to LCDs that should last 10 years or more.
Right, why take the mirror off the ceiling before you have to? :)
(Denny Crane: "Sometimes you can only look for answers from God and failing that... and Fox News".)
Yeah. Murphy's law would require a major price drop/better technology the day after I bought one....
Any number of places sell TVs for less than the examples given.
I wouldn't ever pay much over $2k for anything like that.
I would also put your hand over the TV to find out if it vents lots of heat or not. If it does, don't buy it, I think the electonic parts will butn out n such a hot enviornment.
(Denny Crane: "Sometimes you can only look for answers from God and failing that... and Fox News".)
Murphy's Law dictates that the TV I spend $600.00 on will go on sale for $300.00 in exactly 31 days - one day after the low price guarantee expires.
I looked at a 62 inch DLP unit at Best Buy for $3499 and it had a better picture than those selling for much higher. Of course, I found it online for around $2500 shipped.
"""Great news.
Now, if there were only something worth watching on TV!"""
You have to pay extra for that.
I had the old Norton and wanted to buy the new Norton. It was a nightmare to remove the first program.
Would you mind pinging me about 30 days after your next TV purchase. I'm in the market for one now, but I can wait.
Wow, capitalism works. Who'da thunk it?
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