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Sales of plasmas, LCDs rise as prices drop

December 9, 2007

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After 48 years in business, John Kiefer has seen plenty of people shopping for TVs. And he never has seen anything like the transformation that has led to the current popularity for the industry - in terms of price, technology and high-end quality.

"The technology isn't improving anymore, because we're already there," Kiefer said. "We're every bit as far as we're going to go. We've got televisions today that are every bit as good as the cameras that are taking the pictures we're seeing. There's no difference."

But there is one major difference, in one crucial area: price.

Falling prices on plasma, LCD, DLP and other high-definition sets are fueling a surge in sales. Kiefer, for one, figures that he's selling four or five times as many high-performance television sets this holiday season as he did at this time a year ago.

"A television that we sold last year for $8,000 or $9,000, you can now buy for $4,000," said Kiefer, owner of Kief's Audio Video, 2429 Iowa. "The prices have come down enormously. It's so competitive now that if me or any other store isn't competitive, we won't sell any product."

An executive for Matsushita Electric Industrial Corp., which makes Panasonic products and is considered the world's largest manufacturer of consumer electronics, told Bloomberg last month that he expected the tough competition to cut U.S. prices for flat-panel TVs by $400 during the fourth quarter.

The price declines come as sales of LCD (liquid-crystal displays) are expected to surge by 86 percent for this year. Sales of plasmas - with prices already down 20 percent for the year - are projected to finish the year up by 22 percent.

Marketing firm iSupply Corp. projected last week that global revenue from sales of so-called "full-HD" TVs would reach $75.4 billion during the next three years, up from just $3.8 billion last year. Such products are gaining popularity as more manufacturers offer 1080p sets, full-HD game consoles such as PlayStation3 and Xbox 360 become available, and demands for higher-resolution movies and television programming continue to rise.

People are buying into the highest levels of TV technology, provided they work to understand what they're getting, said Riddhi Patel, iSupply's principal analyst for television systems.

"Too many consumers are confused about what television they want or what they are buying," Patel said. "There are far too many acronyms, and while education at consumer electronics stores is improving : it is not at a level where consumers understand it all."

Kiefer said that consumers were becoming more in tune with TV technology, but not always for the good. Too often, he said, customers come in after having read reviews on an online blog and think they have all the answers.

He suggests taking the time to ask the right questions, consider your own viewing conditions and be willing to think about the bang you'll be getting from the bucks you're willing to spend.

"You want value," Kiefer said. "Value is when you get what you pay for."

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