El Segundo, Calif. — The average selling price (ASP) for LCD TVs rose significantly in July and remained at a higher level in August, according to a new report from market research firm iSuppli.
The report attributes the rise to the introduction of new more advanced LCD-TVs that carried higher price tags than older models. Key premium features including Light Emitting Diode (LED) backlights, and support for full 1080-progressive resolution were listed as newer features that helped to drive prices higher in the period.
The ASP was further bolstered by stabilization in the pricing of older-model LCD-TVs in August, ending a period of rapid declines, iSuppli said.
For all sizes of LCD-TVs sold by premium brands in June, the ASP was $1,799. In July, prices increased because of the addition of new models, rising 7.4 percent to reach $1,933. In August, brand and retailer promotions on some models and new model introductions continued, keeping prices stable at an average of $1,931.
Although the news is good for profit seekers, iSuppli warns that it isn’t likely to last long.
“Unfortunately for LCD-TV brands—but fortunately for consumers—this is only a temporary phenomenon,” said Riddhi Patel, principal analyst for iSuppli’s television service. “Prices are set to begin declining again in September and will continue to do so in the fourth quarter, even in the peak selling season during the holidays.”
The major competitive battleground for LCD-TV brands in 2007 is the 40/42-inch market. New 40/42-inch model introductions are arriving at a rapid pace as this product has become the sweet spot for LCD-TV vendors, offering the best combination of pricing and volume, according to iSuppli.
Prices for most 40/42-inch models did not change between June and July, but iSuppli anticipates this scenario will shift with prices declining further as the end of the year approaches.
“Competition in the 40/42-inch LCD-TV segment has hit a fever pitch as a stiff rivalry has developed between Sony and Samsung in high-end, premium sets. Each company in the United States sells 15 models of high-end premium LCD-TVs that are priced within $50 and $150 of each other,” the reported noted.
At the value end of the market, Sharp’s 42-inch model is competing against the value brands of Vizio and Westinghouse. Having taken the market share lead in North America in the second quarter in terms of LCD-TVs unit shipments, Vizio represents a significant challenge to more established brands, said Patel.
Meanwhile, Philips has cut its prices aggressively during the past six months, and has managed to increase its market share in the 40/42-inch segment.
“Besides price, the key to success for brands in the 40/42-inch space is aggressive marketing,” Patel said. “Brands are in a fight to obtain the best shelf space and to get visibility in all sales channels. To gain an edge in these battles, brands must make effective use of marketing.