Flat-panel TV will again be a central target for holiday promotional pricing, with 37-inch LCD TVs, 42-inch LCD and plasma sets, and 50-inch 1080p plasma sets, predicted to see some of the most aggressive activity, according to market researchers at Current Analysis West, an NPD Group company.
Speaking during a recent conference call for investment banking concern CIBC Work Markets, Sang Tang, Current Analysis West high-definition TV analyst, said the impact of market share advances from third-tier players like Vizio, Westinghouse Digital and Olevia will force first- and second-tier players to be more aggressive in pricing products, which will, in turn, result in lower-tier players offering more "door-buster" specials with key retailers the day after Thanksgiving.
Door-buster specials were defined by the firm as limited-time advertised specials usually targeting product from third-tier brands at loss-leader prices.
For a 37-inch LCD TV Current Analysis said the average selling price in November will be about $843, falling to $794 in December. The Black Friday door-buster price for the segment is predicted to be $499.
In 42-inch LCD TV, Current Analysis West said the average selling price in November/December will be $1,150 with a Black Friday door-buster price of $619. In 42-inch HD plasma sets, the firm said the average November/December selling price would be $1,250 while the predicted Black Friday door-buster price will be about $619.
In 50-inch 720p HD plasma, Current Analysis West said the average selling price in the November/December holiday season will be $1,800 with a Black Friday door-buster price of $999.
In 52-inch 720p HD LCD TV, Current Analysis West said the average selling price in November/December will be $3,300 with a Black Friday door-buster price of $999.
"The reason you see less price aggression [in 52-inch LCD] is the holiday season is an especially price-sensitive time period, and we think this class of product is something that will see a lot more aggressive tactics from manufacturers and retailers on around the Super Bowl," said Sam Bhavnani, Current Analysis West research director.
Tang said he expects to see "huge holiday price drops in 50-inch 1080p plasma driven by Panasonic with others to follow." The firm predicts average November/December holiday pricing for the segment of $2,473, reflecting a 66 percent drop from a year earlier.
In flat-panel market trends, Tang said "screen sizes are increasing because of the heated price competition at lower screen sizes, which is forcing retailers to find different ways to increase their margins or revenues, and large screen sizes provide them with this."
The market analyst said that based on retail shelf share, average screen sizes for flat-panel TVs have increased from 38.2 inches in the second quarter of 2006 to 40.7 inches in the third quarter of 2007.
By retail channel, CE retail chains and warehouse clubs are "driving the screen-size growth," Tang said.
Shelf share by display technology continues to skew in favor of LCD, Current Analysis West said.
"The message is clear, it's an LCD world," Tang declared. "In one year, LCD has grown from 23 percent shelf share in Q3 06 to about 51 percent today, and these gains have significantly hurt plasma."
"With very few exceptions we think Panasonic stands out as the only plasma manufacturer with the ability to remain competitive," Tang said.
Tang pointed to major price reductions in 1080p plasma products, particularly Panasonic's 42-inch models, which give the company an exclusive screen size in 1080p resolution.
"No other plasma manufacturer offers this, and we don't think other plasma manufacturers will, either," said Tang. "We think [other plasma makers'] sub-50-inch 1080p focus will be, surprisingly, on LCD rather than plasma. I think you'll see players like LG and Hitachi jump into the mix. We think plasma's 1080p focus will be at 50 inch, and we think that's a good move for them."
Closer price parity between LCD and plasma in the 42-inch screen sizes has marginalized plasma's relevance below 50 inches, Tang said.
"But we still think plasma enjoys a big advantage at 50 inches," said Tang. "At that size shoppers are savvier and more affluent, and more willing to forgive the lack of 1080p and appreciate the other differences such as contrast ratio."