Staggering Flatpanel Prices Recorded on Black Friday

The traditional holiday sales season began with a bang—or a shot in the foot—for electronics retailers determined to push flatpanel TVs out the door at prices consumers couldn’t resist. 12/04/2006 7:00 AM Eastern

Staggering Flatpanel Prices Recorded on Black Friday

Dec 4, 2006 12:00 PM

The traditional holiday sales season began with a bang—or a shot in the foot—for electronics retailers determined to push flatpanel TVs out the door at prices consumers couldn’t resist. One industry executive observed in the week following Black Friday that flatpanel manufacturers reported price levels for flatpanel TVs at levels they hadn’t expected to reach for another 18 months.

According to published reports of Black Friday sales, Panasonic stepped up its aggressive stance on plasma TV prices to staggering levels, with Best Buy stores selling 42in. high-definition plasma TVs for $1,000, compared with a minimum advertised price of $2,500 just months before. A Panasonic 50in. plasma HDTV netted $2,399 at Circuit City last week.

On the LCD side, second-tier brand Prima set a punishing price point at Circuit City with a $179 tag for a kitchen-size 15in. LCD with 1024x768 resolution. Leader brand Visco was selling a 32in. HDTV LCD at Wal-Mart for $598. Akai, the recently resurrected TV brand, popped up at Wal-Mart at $748 for a 32in. LCD with a built-in DVD player. The RCA brand was able to muster an $847 price tag at Wal-Mart for a 32in. LCD HDTV, down $150 from its suggested retail price. Larger screen sizes from high-profile brands weren’t immune to the discounting, either. Amazon slashed a thousand dollars off the price of a 52in. Sharp AQUOS LCD TV, a 24 percent reduction to $3,269. And Sony’s 40in. Bravia XBR LCD took a $1,000 hit, too, coming in at $2,550.

Bare-bones pricing is good news for consumers and unit sales forecasts, but overall industry revenues are expected to take hit for the fourth quarter. Market research firm Pacific Media Associates predicts an 80 percent increase in unit sales of flatpanel and rear-projection TVs for 2006. And the company predicts 3.2 million flatpanel displays will ring up at retail in the fourth quarter alone.

“Everyone expects growth in unit sales, but the big story is on the revenue side,” says Pacific Media VP Rosemary Abowd. “Average street prices continue to decline steadily, in spite of the move to larger screen sizes and higher resolution models. As a result, manufacturers are selling more units but getting less in return.” Pacific Media expects the trend to take an even worse turn next year. “We project that revenues for 2006 will be only 42 percent greater than 2005, and that they will be flat for 2007 even though unit sales will increase,” Abowd says.

The slim-margin reality of the flatpanel display, once a comfortable profit center for the custom installation dealer base, puts more pressure on custom installers to come up with ways to shore up profits with video projectors, although prices are taking a drop in the two-piece projector market as well.

Epson recently introduced its flagship DLP projector, a three-chip LCD model that will retail for just $4,999. The company claims a contrast ratio of 12,000:1 from its Epson Absolute Black technology. The PowerLite Pro Cinema 1080 will ship to dealers in January.

High-end projector makers are adjusting, too. SIM2 launched last month a 1080p projector at sub-$10,000. Built on Texas Instruments’ DarkChip3 DMD (Digital Micromirror Device) chipset, the D80 single-chip projector packs a seven-segment color wheel, 10-bit video processing, and 160W high-output lamp. Contrast ratio is given as 4,000:1. Footprint of the compact projector is 14x12.5in..

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