iSuppli: LCD TV Sales Dip As Prices Rise

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El Segundo, Calif., - A recent market study by


found prices of LCD TVs in the United States surged upward in July due to the introduction of new, more advanced models and reduced promotional activity on older goods.

 The average retail price in July for an LCD TV in the United States was $1,136, up 7.2 percent from $1,060 in June, the highest rate of increase in at least a year, iSuppli said.

The price also was up 2.8 percent from $1,104 in July 2009.

 "While pricing often oscillates on a month-to-month basis, a year-over-year increase is unusual in the LCD TV market, where annual price erosion rules due to falling panel costs and escalating competition," said Riddhi Patel, television systems director at iSuppli.

Patel said that after small sequential declines in May and June, "average prices for LCD-TVs increased in July with the arrival of a flood of new sets."

More than 20 new models were added to each of the size ranges, with the majority of the models adding advanced feature sets and higher price points.

"With these new models available, sellers cut back on deals designed to stimulate the sales of older LCD TVs and reverted back to the regular prices," according to Patel.

Among the key new features introduced were LED backlighting systems, 3D display capability, higher refresh rates (120Hz and 240Hz), and built-in Internet capability, iSuppli said.

LCD TV price trends in July varied among different retailer types, according to iSuppli. Prices at mass merchants and club stores, for instance, declined on average on a sequential basis, while those at consumer electronics and online retailers saw increases. The price changes could be attributed to the brand and product mix at each retailer.

Some of the higher average price increases were observed at retailers -- including Amazon, Best Buy, Costco and Crutchfield, each of which increased the number of step-up and premium models in their sales mix, iSuppli said.

In comparison, stores like Vann's, hhgregg and other regional chains saw a slight price decline, sticking with a mix of new and older models, and by placing older models on sale.

Patel cited existing economic uncertainty and caution among consumers as factors in the demand changes among mass merchandisers and club stores.

Promotions at such stores have been slower than the prior months, adding to their woes, Patel added.

"Nonetheless, iSuppli expects retailers to become aggressive once again with their promotions in the upcoming months in order to fuel demand," she continued.

Overall, the U.S. LCD TV market is experiencing a softening in sales due to factors including seasonality, increasing prices for some key sizes and a slowdown in consumer uptake given the economic uncertainty, iSuppli said.

In July, retail inventories rose and stood at six weeks to nine weeks on average -- considered somewhat high for this time of the year. Brands and retailers, in order to fuel demand and the replacement cycle, will have to come up with aggressive promotions for the rest of the third quarter to generate excitement for the upcoming holiday season.


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