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Report: TV Prices Fall to Boost Year-end Sales

20 Dec, 2011 By: Erik Gruenwedel

Spurred by Black Friday discounting, retail prices for televisions in November fell to their lowest level in eight months, according to new research from IHS.

Flat-panel TVs, which include LCD and plasma units, saw their average retail price drop 3.3% to $1,113.91 from $1,152.55 in October. The price was the lowest since March when the average TV retailed for $1,086.64, excluding discounts and/or rebates.

Domestic TV demand continues to be weak because of significant unemployment, and consumer confidence has been low in the face of a slow economy, according to IHS. Black Friday (Nov. 25) prices underscored how low manufacturers were willing to go to court the consumer. For instance, Sharp sold a 42-inch 1080p LCD TV at Best Buy for $200, while a 47-inch 3D LCD TV, with a bundled Blu-ray player from LG Electronics, was priced at just $799 at Walmart.

“The November low reflects the usual trend of television prices beginning their descent as the holiday season begins, punctuated by the major discounts seen during Black Friday,” said Lisa Hatamiya, research associate for displays at IHS. “This is also the time of sharp price reductions in the channel, with brands eager to move shipments to meet revenue targets and pushing out sets with older features to make way for new models in the coming year.”

Among LCD TVs, prices in November fell 2.7% on average to $1,020. Compared to October levels, LCD prices dropped from 1.5% to 4.5% in almost all categories. The lone exception being 21-inch to 29-inch TVs, which saw a 1.5% price hike following increased demand for premium-branded TVs in that size class.

For older LCD TVs featuring cold cathode fluorescent lamp technology — compared to newer light-emitting diode, or LED, counterparts — a 50-inch-and-larger CCFL unit saw a drop of $201, compared to $54 for 40-inch-and-larger LED televisions. The large price reductions in CCFL are consistent with manufacturer goals to clear inventories of CCFL-type LCD TVs going into 2012, in hopes of focusing greater sales efforts on LED-backlit sets that provide greater margins.

3D LCD TVs also saw price reductions, with average pricing in November down to $2,201 — a decline of 0.7% from October and 27% less than a year ago.

Among plasma sets, average prices declined 4% in November to $1,533. CE manufacturers are expected to continue focusing on 3D plasma units to maintain revenue and average selling prices, even as the plasma market is gradually being phased out altogether, according to IHS.

TV prices are expected to continue to decline in December. This should help boost sales for the fourth quarter, Hatamiya said, compensating for some low points in a year of generally weak TV sales.

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