Austin, Texas – Average selling prices (ASPs) on LED-based LCD
TVs fell twice as fast in 2009 as they did in 2008, year to year, and fell 21
percent for plasma displays in the same period, according to a new
report.
The market research firm’s Quarterly TV Cost and Price Forecast
Model & Report attributed the changes mainly to a reduction in panel prices
that resulted from massive oversupply in Q4 2008 and Q1 2009. The overall
blended ASP for LCD TVs fell 24 percent.
DisplaySearch said unit demand for flat-panel TVs in 2009 was
much better than expected at the beginning of 2009, mainly due to price
erosion.
During the first half of the year, it was easier for brands to
cut prices, as LCD TV panel prices had plummeted during Q4 2008 and Q1 2009,
affecting products sold in Q1 2009 and Q2 2009. However, the situation reversed
itself in the second half, according to the study.
“Because the rate of ASP decline was slower at retail during the
first half of 2009 than the pace of panel price declines, manufacturers and
retailers were able to boost margins from the low levels in Q4 2008,” stated
Paul Gagnon, DisplaySearch North American TV market research director.
“However, during the second half of the year, panel prices increased, peaking
in September, and stayed fairly elevated in Q4 2009
during what is normally a weak period seasonally. As a result, TV manufacturers
and retailers gave back the margins gained early in the year to ensure that
retail pricing didn’t stagnate, or even rise, which could have been disastrous
to demand.”
Average prices for LCD TVs are expected to fall more slowly in
2010 as the rate of LCD-panel price erosion slows sharply, especially with
booming demand in China keeping the supply situation tight in the first half of
the year. In addition, the increased mix of premium priced LED-backlit LCD TVs
and 3D TVs will serve to help offset natural price erosion, resulting in the
volume weighted blended average price falling only about 4 percent. LED-backlit
LCD TVs carry premiums ranging from 30 percent to 50 percent, although those
premiums will drop quickly as the supply chain matures and brands drive LED
margins down to hasten the transition away from CCFL models. 32-inch HD LCD TVs
could approach $300 on average by the 2010 holiday season, even from premium-tier
brands, although the margins for such a commoditized-size category will be
negative. Supply-chain participants are actively trying to transition consumers
towards more profitable size categories, especially 40-inch-plus.
As for plasma displays, average prices are forecast to fall 15
percent to 25 percent in 2010, also at a slower rate than in 2009, but a little
faster than comparable LCD TV sizes, DisplaySearch predicted.
All 50-inch and smaller
PDP TVs will be below $1,000 on average by Q2 2010, and even large sizes like
58-inch are now below $2,000 and seeing an increase in demand.
The 42-inch HD segment remains a volume driver for the PDP TV
category, largely due to promotional prices that are nearing the $500 mark.
Average prices for 42-inch HD PDP TVs are forecast to fall below
$500 by the 2010 holiday season. Fifty-inch
1080p plasma TV has been gaining share at a healthy rate recently, as all three
major producers are now fielding a wide range of 1080p models, and 50-inch
1080p will be the key size for the rollout of 3D PDP TV this year,
DisplaySearch said.
To obtain the report, interested parties can contact
DisplaySearch’s Charles Camaroto at (888) 436-7673 or (516) 625-2452, by email at
or by contacting the nearest regional DisplaySearch office in China, Japan,
Korea or Taiwan.
