This is a very sensitive issue. Your comment "Retailers may get hit on the bottom line as to not pass along higher prices to consumers", really got me thinking. As a retailer, and a Past President of MERA, this scares me, knowing how our industry usually reacts. (Not to mention the state of our industry, and the economy.) Now is an opportune time for the industry to do something which in the long run will benefit us, and consumers. If we have to go through raising prices, why not increase margins at the same time? From the top to the bottom of consumer electronics, manufacturer, rep, and retailer, raise margins. I'm not talking about .5%, I'm talking about whatever it takes to build profit back into consumer electronics up and down the chain. (1%,2%,5%?) It would increase profits for manufacturers, reps, and retailers. If we raise prices $10-$20 per piece (or whatever it is), why not go a little further, and add $20-50 per piece? I'm not advocating gouging consumers, I'm just saying raise prices a little more than you have to, so as to give us all a more stable bottom line. More than likely this will only happen once, so why not make it work for all? I would say to the manufacturers, have some guts, when the price increases come, raise prices just a little bit more to increase PROFIT! Consumers (and the industry) will follow. I'm not afraid in my store to raise prices, which may cause a slow down for awhile in sales. I'd rather endure slow business for awhile, then have prices raised, have less profit, and the unstable market situation that may follow. Consumers are used to insurance, food, and gasoline prices going up, while in the CE industry, our prices and profit have fallen for years. Do we really want to have only one large retailer to sell consumer electronics? Is that where we are headed? Are CE products not desirable enough to compete for consumer's discretionary dollars or are we as an industry failing to create that demand? I thought I'd send you my opinions as you have a good overview of the CE industry. What do you think?

BRAVO! Everyone knows this to be true. I wonder if any will have the "guts" to step up and make it happen?

Higher margins are not sustainable, because CE products are such a commodity that a 0.1% price reduction will influence someone to buy from one company over another. With that kind of cut throat business... it is, as will be a race to the bottom. The only way to have sustainable margins is to make sure your productivity growth is high enough to allow you to keep up (or surpas) the rest of the pack.

As someone who's been shopping for two new LCD TVs for the last 4 months, and one who also tracks LCD TV and plasma display panel prices religiously, I can say with a high degree of confidence that flat TV prices, at least, have been declining rapidly in recent months and there is no reason to expect this trend to change. Costs (which have been rising in China for years) do not determine retail prices; supply and demand do. And the 7-8 major Korean, Taiwanese, and Japanese manufactures who make key flat TV components (ie, not the Chinese, who merely assemble components, a tiny portion of the value of large TVs) in aggregate will be expanding TV capacity on the order of 45-65% this year. Lots of TVs, lots of current TV inventory, and still-fat margins on large flat TVs at the big US retailers (which will get squeezed). So prices will keep coming down -- Sony management last week said they expect flat TV retail prices to decline by 20-30% in USD terms this year. I think Sony knows a bit about TVs. And one more thing? The reason manufacturers in China are moving inland is to take advantage of lower labor costs -- ie, a larger supply of labor willing to accept lower wages than in the big manufacturing centers near Shanghai and Guangzhou. Even if wages in Wuhan, for example, rise by 15-20% this year, they started this year at less than 1/2 of Shanghai wages, so the move inland still leadss to lower, not higher, wages. D

I am a consumer. I know nothing of margins or bottom lines or GDPs or CCDs or CMOSs or pixels or plasma generators. I do know that the American consumer is as dumb as dog sh*t, but not so dumb to pay more for an inferior product. If retailers want profit they should pressure manufacturers to "build a better mousetrap". Maybe we have come to the end of the era of the 'engineered to break' products. Consumers WILL pay more for quality, only problem is...no one is manufacturing quality - the paradigm shift should be with the manufacturer. I speak (humbly of course) for the legions of consumers who say, "Enough with the junk... you want our money... get it the old fashioned way... earn it." I would say to the retailers have some guts, tell the manufacturer that you won't sell their product for a higher price unless it's of higher quality. Period. Change isn't going to happen by whipping a dead horse, change happens when someone has the cohones to do something different.