San Antonio — The Progressive Retailers Organization was at the Westin La Cantera Hill Coun
In-dash DVD is undergoing a price war that has sent prices on low-end A/V head units tumbling to about half their value.
Competition for market share caused low-end DVD monitor prices to fall from about $599 at the beginning of 2006 down to $299 for a Black Friday special on a unit from Phase Linear, an Audiovox brand.
Several suppliers expressed concern at the fast decline of DVD pricing. They noted that once a consumer sees a $299 price tag, he tends to believe that is the true value for the product.
"Clearly there are new rules of the game," said Kenwood consumer electronics senior VP Keith Lehmann. Several suppliers acknowledged that the price war was due to market share competition at the low end.
Audiovox car audio sales and marketing senior VP Tom Malone said, however, that he expects prices at present will stay at a low of $399. "Certain retailers will test the market at $299 as they try and bridge the gap between high-end CD and entry-level multimedia. We do not feel, however, that this will become 'the' new price point. Everyday price points will still be $399 and above."
Jensen said its lowest priced model for 2007 was currently at a street price of $399. At the higher end, many lines start at $799 this year.
Other factors are also contributing to lower prices, said Dual senior product manager Robb Groner, who pointed to economies of scale on 7-inch LCD panels. "It's the most popular size used in portable DVD players so it's helped get the price down," he said.
Lehmann said there are important differences in the products found at the low end compared with the high end. "A transport can be either a 5,000-hour transport or a 15,000-hour transport. It can use a pressed aluminum chassis or sheet steel. And you can use an open-format chip set or a higher-end chipset with better performance," he said, adding, "DVD will continue to see price wars. There's no doubt. But I also believe awareness at the dealer and consumer level will see the landscape for what it is, and understand the difference between entry level and better products that cost more."