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Flat panel TV prices set to tumble 30%
New York, Dec 04: If a reasonably-priced flat panel TV is on your holiday wish list, you might want to wait until next year.
New York, Dec 04: If a reasonably-priced flat panel TV is on your holiday wish list, you might want to wait until next year.
Shoppers looking for deep bargains on expensive flat-panel televisions will find only marginal discounts as the holiday season heats up, but experts say prices will tumble by some 30 per cent in 2004.
Fueled by an anticipated jump in production, that drop may help bring the svelte TVs closer to a mainstream audience by making the screens -- some which cost as much as a new car or a semester of college tuition -- more affordable.
"The type of pricing you are seeing right now is expected to hold fairly constant for the next few months at least," said analyst Sean Wargo of the Consumer Electronics Association. "Next year the price will look quite a bit different."
Currently, flat panel TV sales are still dwarfed by sales of bulky old-fashioned TVs, which still cost considerably less. A 27-inch flat panel TV can cost over $2000, more than 10 times what a similar-sized boxy TV would cost.
Flat panel TVs come in two forms: liquid crystal displays, or LCD, and plasma. In LCDs, electrical current causes the crystals to align so that light selectively passes through them.
With plasma, each pixel on the screen is illuminated by bits of charged gas, somewhat like a neon light.
More and more consumers are drooling at the sight of the high-quality TVs in stores, eyeing the thin screens as replacements for older, bulkier cathode ray tube and projection TVs. But, wary of sky-high prices, average shoppers are pondering whether to buy now or wait for prices to drop.
Leading electronics retailer Best Buy Co Inc. this week advertised 42-inch Plasma TVs for USD 4,000 to USD 6,000.
"(Plasma's) are cool and people see them in bars and in stores, but they are too high for most people to buy them," said Bob O'Donnell, an analyst at research firm IDC. "If we walked into a store and saw a 42-inch plasma for USD 1,500, out would come the credit card. But we see the price now and say 'Oh well, maybe next year.'"
Despite the buzz for the svelte TVs, flat panel sales are less than 3 per cent of the entire TV market, still dwarfed by boxier, and more reasonably priced tube-based TVs. However, the cost of making flat screens will drop as manufacturers become more efficient. Moreover, retailers, which now include personal computer makers like Dell and Gateway, will cut prices as they compete for sales of the TVs, which deliver high profit margins.
Global production of LCD TVs will more than double next year to between eight and 10 million sets from about four million in 2003, analyst say. That is out of a total TV market of about 150 million units.
As a result, prices for 30-to-39 inch LCD TVs may tumble as much as 38 per cent next year, to about USD 3,000 from USD 4,800, IDC's O'Donnell anticipates. Wargo, of the Consumer Electronics Association, sees LCD TVs in the range of 17-20 inches dropping to about USD 700 next year from around USD 1,000.
"Maybe less," he added. "It depends on how quickly that capacity comes online." That rush to make screens is borne of a need to fill demand for flat panel displays in everything from wide-screen TVs to laptop computers to handheld personal digital assistants. Samsung Corp. is the most aggressive investor in flat screens at the moment. It announced a USD 16.6 billion spending plan for the next 10 years and agreed to a USD 2 billion deal with Japan 's Sony Corp. to boost production. TV makers can help themselves by cutting prices, analysts said. Research firm iSuppli estimates global sales of LCD TVs will by 2007 reach 27 million, and 10 million in North America . Global plasma sales by 2007 will reach 6 million.
Bureau Report
Shoppers looking for deep bargains on expensive flat-panel televisions will find only marginal discounts as the holiday season heats up, but experts say prices will tumble by some 30 per cent in 2004.
Fueled by an anticipated jump in production, that drop may help bring the svelte TVs closer to a mainstream audience by making the screens -- some which cost as much as a new car or a semester of college tuition -- more affordable.
"The type of pricing you are seeing right now is expected to hold fairly constant for the next few months at least," said analyst Sean Wargo of the Consumer Electronics Association. "Next year the price will look quite a bit different."
Currently, flat panel TV sales are still dwarfed by sales of bulky old-fashioned TVs, which still cost considerably less. A 27-inch flat panel TV can cost over $2000, more than 10 times what a similar-sized boxy TV would cost.
Flat panel TVs come in two forms: liquid crystal displays, or LCD, and plasma. In LCDs, electrical current causes the crystals to align so that light selectively passes through them.
With plasma, each pixel on the screen is illuminated by bits of charged gas, somewhat like a neon light.
More and more consumers are drooling at the sight of the high-quality TVs in stores, eyeing the thin screens as replacements for older, bulkier cathode ray tube and projection TVs. But, wary of sky-high prices, average shoppers are pondering whether to buy now or wait for prices to drop.
Leading electronics retailer Best Buy Co Inc. this week advertised 42-inch Plasma TVs for USD 4,000 to USD 6,000.
"(Plasma's) are cool and people see them in bars and in stores, but they are too high for most people to buy them," said Bob O'Donnell, an analyst at research firm IDC. "If we walked into a store and saw a 42-inch plasma for USD 1,500, out would come the credit card. But we see the price now and say 'Oh well, maybe next year.'"
Despite the buzz for the svelte TVs, flat panel sales are less than 3 per cent of the entire TV market, still dwarfed by boxier, and more reasonably priced tube-based TVs. However, the cost of making flat screens will drop as manufacturers become more efficient. Moreover, retailers, which now include personal computer makers like Dell and Gateway, will cut prices as they compete for sales of the TVs, which deliver high profit margins.
Global production of LCD TVs will more than double next year to between eight and 10 million sets from about four million in 2003, analyst say. That is out of a total TV market of about 150 million units.
As a result, prices for 30-to-39 inch LCD TVs may tumble as much as 38 per cent next year, to about USD 3,000 from USD 4,800, IDC's O'Donnell anticipates. Wargo, of the Consumer Electronics Association, sees LCD TVs in the range of 17-20 inches dropping to about USD 700 next year from around USD 1,000.
"Maybe less," he added. "It depends on how quickly that capacity comes online." That rush to make screens is borne of a need to fill demand for flat panel displays in everything from wide-screen TVs to laptop computers to handheld personal digital assistants. Samsung Corp. is the most aggressive investor in flat screens at the moment. It announced a USD 16.6 billion spending plan for the next 10 years and agreed to a USD 2 billion deal with Japan 's Sony Corp. to boost production. TV makers can help themselves by cutting prices, analysts said. Research firm iSuppli estimates global sales of LCD TVs will by 2007 reach 27 million, and 10 million in North America . Global plasma sales by 2007 will reach 6 million.
Bureau Report