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Analysts See Black Friday Flat-Panel TV Repeat

10/22/2007 02:00:00 AM Eastern

Key analysts tracking the consumer television industry said that the notorious holiday promotional period known as Black Friday will again draw aggressive pricing activity this year, although some of that will be directed at different screen sizes, display technologies and a broader selection of brands than in 2006.

Hot segments to watch, they said, will be both LCD and plasma flat-panel models, in both 720p and 1080p resolution levels.

The hardest-hit segment will be rear-projection sets, which will have to contend with door-buster specials from big-screen plasma sets.

Most of the analysts queried by TWICE say they believe that plasma TVs in the 42-inch and 50-inch screen sizes will see the wildest ride, and some predict that heavy holiday promotions in the 50-inch 1080p plasma segment will go on to help the display technology fend off LCD TV advances in the larger screen sizes next year.

“Black Friday 2006 signified a passing of the torch from plasma to LCD at 42-inch,” said Sang Tang, HDTV research analyst with Current Analysis West, an NPD Group company. “This year, expect plasma to turn the tables on LCD. Plasma will be very aggressive at 50-inches and will maintain a foothold on the high-end market. In other words, there won't be a flat-panel shakeout this year. LCD maintains its mass consumer appeal, while plasma takes the high-end market.”

“We expect to see healthy price reductions in plasma TVs from Q3 to Q4 as well as in 1080p LCD, as that is where supply is plentiful, and in the case of 1080p LCD and plasma, where margins are high,” said Ross Young, president of DisplaySearch, a market research firm that is part of The NPD Group. “We may also see some brands end the life of their 720p TVs and exclusively focus on 1080p, which could lead to some larger-than-usual [average selling price] declines in 720p.”

Riddhi Patel, iSuppli TV systems principal analyst, said, “The price war will be intense specifically at 40- to 42-inch levels. The competition will be not only between LCD and plasma but also between 40- and 42-inch LCD. Currently 42-inch LCDs are lower priced than the 40-inch LCDs. This is mainly because of the brand mix at each of these sizes.”

Tamaryn Pratt, Quixel Research principal, said to expect “significant price compression in 50-inch plasma (720p)” on Black Friday.

“For the top-tier brands we'll see that prices will fall to $1,299 to $1,399, minimally for Black Friday and regularly over the holidays at $1,599 to $1,699 depending on the feature set. Wider availability of larger-sized 40-inch-plus LCD TV is creating the majority of this price pressure,” said Pratt.

She added that in 42-inch 720 plasma TVs a few manufacturers should pull out $799 or below specials, with top-tier prices for the category running around $999-$1,099 in the holiday season.

But “huge” volumes will be done in the 40- to 42-inch LCD TV segment, she said, where 1080p will be an important factor.

“We can expect opening brands at $999 to $1,099 at 40- to 42-inch 1080p, all the way to $1,399 to $1,499 for opening 1080p at the same screen size,” she forecasted.

DisplaySearch's Young also saw “$799 for a 42-inch HD plasma TV with double-digit channel (brand and retailer) margins and $1,099 for a 50-inch HD plasma with single digit margins,” as difference makers this year.

Riddhi Patel, iSuppli TV systems principal analyst, said to look for 42-inch LCD TVs at $999, 37-inch LCD TVs at $699, and 50-inch 720p plasmas at $1,199, all at 720p levels, as big holiday movers.

As for which brands to watch for the heaviest activity this year, Patel said heavy price promotions will again come from all manufacturer levels — both first tier (premium) and value second- and third-tier brands.

At the low end, Black Friday door-busters are likely to come from “the usual suspects — Vizio, Westinghouse, Olevia,” she said. At the high end, she looks for Sony, Samsung and others to compete.

DisplaySearch's Young said he expects at least some of the price-slashing activity to come from the manufacturers that control panel supplies — Sony, Samsung, Sharp and Panasonic. “LGE also has ample internal LCD and plasma capacity and can make some major moves,” he said. “Syntax, Westinghouse and Polaroid were very aggressive last year and are already at low prices, so I would expect them to be involved as well. In addition, with Vizio able to pass along savings from lower [warehouse] club channel margins to the consumer due to lack of channel conflicts, they should maintain very aggressive prices.”

Pratt of Quixel said she has her eye this year on Sharp, which “is going to continue its full court press in the 52-inch LCD-TV space. They have factory capacity behind them and this is the time for them to take advantage of it while the other brands catch up.

“Samsung and Sony will also be significant in the 40- to 42- and 46 inch segments,” Pratt added. “Let's not forget Vizio — they have the wall of orange at Costco as well as ad spots on ESPN, so expect them to be highly impactful again this year in both LCD TV and [plasma].”

At the top, “Panasonic and Samsung will continue to lord over the PDP category in sheer volume. Pioneer's new Kuro line also seems to be generating momentum,” she observed.

Current Analysis West's Tang is picking Vizio, Westinghouse and Syntax to be the pace setters in opening price point LCD, while Panasonic will be very aggressive on the plasma side.

Toshiba will be somewhat of a wild card this year, he added. “Since leaving the plasma market, Toshiba has been very price aggressive with their LCDs, and I expect them to continue this push into the holiday season.”

As for the impact on rear projection microdisplay (MD) TV, which saw some Black Friday activity in 2006, the industry watchers said to watch out.

DisplaySearch's Young said: “With 40-inch-plus flat-panel TV prices falling the fastest, MD RPTVs will need to discount at similar rates to keep up.”

Pratt at Quixel warned, “The aggressive plasma TV pricing activity will cause a ripple effect that could impact the microdisplay [rear-projection] TV category — not pretty.”

Tang at Current Analysis West said, “LCD's screen size growth and price competitiveness have forced rear-projection TV and plasma to a more niche, high-end focus. In the high end market, 1080p was the value proposition RPTV offered over plasma.

“With plasma increasing its focus on 1080p 50-inch-plus sets, and offering competitive prices with them, rear-projection TV will be significantly marginalized in the high-end market. Any performance-related or screen size reservations are easily offset by its 1080p, thin form factor appeal.”

Tang said rear projection's salvation could come from a shift in focus “to one that stresses sub-$1,000 price points. Either it does that, or it continues to try to compete against plasma in the high-end market, which, with its increased focus on 1080p, makes for a very difficult situation.”

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