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Flat-Screen TV Prices Finally Come Down
AP ^ | 08/15/05 | GREG SANDOVAL

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."

TOPICS: Business/Economy
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To: jmq

Just in time to watch the Chiefs, huh? :0)

21 posted on 08/15/2005 11:17:57 AM PDT by Skooz ("Political Correctness is the handmaiden of terrorism" - Michelle Malkin)
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To: null and void
Oops. Point taken. One would be a fool to be an early adopter. No one would buy a TV priced almost as much as the least expensive car on the market.

(Denny Crane: "Sometimes you can only look for answers from God and failing that... and Fox News".)
22 posted on 08/15/2005 11:18:40 AM PDT by goldstategop (In Memory Of A Dearly Beloved Friend Who Lives On In My Heart Forever)
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To: nypokerface

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.

23 posted on 08/15/2005 11:18:45 AM PDT by G32
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To: devane617; 1Old Pro

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.

24 posted on 08/15/2005 11:18:49 AM PDT by YaYa123 (@If You Don't Have To, Why Wait?com)
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To: Larry Lucido

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. :^)

25 posted on 08/15/2005 11:18:56 AM PDT by janetgreen
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To: newgeezer

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.

26 posted on 08/15/2005 11:19:30 AM PDT by Clock King
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To: the Deejay
I have thought about a flat screen for the bedroom, but I'm not in any hurry

Right, why take the mirror off the ceiling before you have to? :)

27 posted on 08/15/2005 11:19:36 AM PDT by gov_bean_ counter (Conservatives look at Iraqi dual use chemicals and see WMDs. Liberals see tomato gardens.)
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To: the Deejay
Mine is about six years old. I'll keep it til it wears out before I upgrade.

(Denny Crane: "Sometimes you can only look for answers from God and failing that... and Fox News".)
28 posted on 08/15/2005 11:19:44 AM PDT by goldstategop (In Memory Of A Dearly Beloved Friend Who Lives On In My Heart Forever)
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To: newgeezer
Panasonic boasts 60,000 hours or the equivalent of almost 7 years if it is on 24 hours a day. 8 hours a day would be about 20 years. So they say.
29 posted on 08/15/2005 11:19:59 AM PDT by wallace144
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To: goldstategop

Yeah. Murphy's law would require a major price drop/better technology the day after I bought one....

30 posted on 08/15/2005 11:20:15 AM PDT by null and void (Be vewwy vewwy qwiet, we're hunting wahabbits...)
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To: nypokerface

Any number of places sell TVs for less than the examples given.

31 posted on 08/15/2005 11:20:47 AM PDT by TommyDale
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To: nypokerface

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.

32 posted on 08/15/2005 11:20:56 AM PDT by A CA Guy (God Bless America, God bless and keep safe our fighting men and women.)
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To: Clock King
With improved manufacturing techniques, they'll find a way to solve the plasma degradation problem. In the end, I suspect one will be hard pressed to discover a quality difference between plasma and LCD TV sets.

(Denny Crane: "Sometimes you can only look for answers from God and failing that... and Fox News".)
33 posted on 08/15/2005 11:21:50 AM PDT by goldstategop (In Memory Of A Dearly Beloved Friend Who Lives On In My Heart Forever)
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To: Dont Mention the War
Whenever I check out the HDTVs at Circuit City or Best Buy, I am always stunned at how random the picture quality is from one model to the next. And there is little correlation between price/brand name and picture quality.

Calibration and settings can be very important, and even in the unlikely event the set was set up competently, shoppers like play with them.

You don't have the same problem in a high-end shop.

If I were a manufacturer, I would have a "sales" mode in which the set returned to established defaults automatically, until purchased and the setting changed. (I would also be tempted to make those defaults excessively bright and sharp, to help the side-by-side comparisons, even though home viewing would prefer more moderate settings.)
34 posted on 08/15/2005 11:22:14 AM PDT by Atlas Sneezed (Your FRiendly FReeper Patent Attorney)
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To: null and void; goldstategop

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.

35 posted on 08/15/2005 11:22:23 AM PDT by Larry Lucido
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To: Hexenhammer

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.

36 posted on 08/15/2005 11:22:27 AM PDT by TommyDale
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To: FMBass

"""Great news.
Now, if there were only something worth watching on TV!"""

You have to pay extra for that.

37 posted on 08/15/2005 11:23:05 AM PDT by RedwineisJesus
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To: goldstategop

I had the old Norton and wanted to buy the new Norton. It was a nightmare to remove the first program.

38 posted on 08/15/2005 11:23:23 AM PDT by Eric in the Ozarks (Scratch a Liberal. Uncover a Fascist)
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To: Larry Lucido

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.

39 posted on 08/15/2005 11:24:00 AM PDT by Rokke
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To: nypokerface

Wow, capitalism works. Who'da thunk it?

40 posted on 08/15/2005 11:24:24 AM PDT by TChris ("You tweachewous miscweant!" - Elmer Fudd)
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