Flat-Screen TV Prices Finally Coming Down

The prices for plasma and other flat-panel televisions are starting to plummet thanks to increased competition and a decline in the cost of electronic components.

Flat-Screen TV Prices Finally Coming Down (AP)

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.

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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.

The difference between a high-definition television and an ordinary flat-panel display is rather obvious side-by-side because of the much different aspect ratios. The pictures on both will be terrific, of course, because the stores will usually have the sets connected to a DVD player, which will produce an excellent picture even on my 1989 RCA CRT set.

FILED UNDER: Economics and Business, Science & Technology
James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. Dave Schuler says:

    Expect the prices to go down fast as Motorola’s carbon nanotube LCD’s begin to come into the market.