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."
So, is it true plasma TVs only last a couple years (or, at least, very few hours when compared to CRTs and/or LCDs)?
$4200 for a tv? What a bunch of suckers.
I need a new TV but just hate to do the research. So many varibles, and salemen( it's ok ) trying to make a buck. Home Theater/Entertainment systems is one of the biggest headache purchases a consumer can make.
In another year the prices will fall in half again. Rmember your first computer at 3-4,000, then 2500, then 1500, now 699. 42 inch will be well under a thousand inside 2 years.
Great news.
Now, if there were only something worth watching on TV!
(Denny Crane: "Sometimes you can only look for answers from God and failing that... and Fox News".)
Think that's bad? How 'bout $13,000 + for a plasma tv? Yikes!
You can get a Syntax Olevia HD ready 32" LCD for $1150 at Amazon
http://www.amazon.com/exec/obidos/tg/detail/-/B00067M5O6/ref=ord_cart_shr/102-7504932-8380918?%5Fencoding=UTF8&m=ATVPDKIKX0DER&v=glance
(Denny Crane: "Sometimes you can only look for answers from God and failing that... and Fox News".)
Now all I need is FoxNews and History Channel to be broadcast in HD.
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.
Try downloading Symantec's products.
(Denny Crane: "Sometimes you can only look for answers from God and failing that... and Fox News".)
Got one from Microcenter in Overland Park Kansas for 1000 after rebate of 150. Cool double moniter tv
I gave up on Symantec a few months ago.
That's Moore's Law...
(Denny Crane: "Sometimes you can only look for answers from God and failing that... and Fox News".)
My tvs are 14 yrs. old and still
work just fine.
I have thought about a flat screen for
the bedroom, but I'm not in any hurry.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.