Although falling prices will continue to highlight big-screen TV successes in the second half of 2006, vendors and analysts are looking at “future proofing” to maintain their sanity this year.
Deliveries of the first high-definition optical disc players and a spate of new flat-panel and microdisplay rear-projection models with full 1,080p resolution are expected to keep the sizzle in the HDTV stake, vendors and analysts said.
Advertising slogans like Sony's “Full HD” and Sharp's “True HD” will be thrown around in fourth-quarter promotions to sell the concept of the highest-possible clarity produced by displays that can present images in progressive 1,920 by 1,080 resolution.
Those efforts are expected to plant in consumers' minds the notion that any TV they buy today should at least be ready to display the best picture possible from the new high-definition signal sources that will proliferate in the next couple years.
Sony's TV product marketing VP Phil Abram says, “We think it's important for people who want the ultimate in the HD experience to have 1,080p.”
Sony is running a major “Full HD: 1,080p” second-half advertising campaign that links the 1,080p output of its forthcoming Blu-ray player and PlayStation 3 gaming console with the full 1,080p HDMI inputs on its new XBR BRAVIA and SXRD televisions.
Bruce Tripido, Sharp Entertainment products division senior director and group leader, says Sharp will be using the fruits of its new Gen 8 large-screen LCD panel factory to present a range of fourth-quarter 1,080p LCD TV model introductions this fall.
“The impact of 1,080p products over the balance of the year in screen sizes of 40 inches and above will be significant,” Tripido says. “Sharp will introduce multiple new models over 40 inches during this timeframe in both LCD TV as well as front projector, and they will all be 1,080p. The promise of source devices that will deliver a 1,080p signal makes the 1,080p proposition more compelling than ever.”
Market observers say the 1,080p message will again have the greatest impact in the microdisplay rear-projection TV category this year, but flat-panel LCD TVs are coming on, while the first 1,080p plasmas emerge.
Frank DeMartin, Mitsubishi marketing VP, quoted Intelect market research numbers showing 1,080p models representing 24 percent of microdisplay rear-projection sales in May.
“We predicted 40 percent of the microdisplay sales being 1,080p for the full year,” DeMartin says, “So, now I'm guessing that by the end of the year we might see 50 percent of microdisplay unit sales being 1,080p.”
Steve Kovsky, Current Analysis principal digital TV analyst, says, “1,080p models of all types now comprise 6.85 percent of TV models available at U.S. retail chains, a significant increase from a year ago, when 1,080p levels reached 1.5 percent. In terms of the number of models, today there are 27 1,080p-capable models selling in the U.S. retail channel, compared to only five models in June 2005.”
The numbers will increase as more models are delivered in the late summer and fall.
Tamaryn Pratt, principal analyst with Quixel Market Research, says, “Retailers have seen their 60-inch-plus demand for 720p microdisplay fall off in the first half of 2006 and are now refocusing on 1,080p in those screen sizes for the back half.”
In LCD TV, Pratt says that “of the flat-panel technologies, large-screen LCD TV has the most to gain from 1,080p. As an industry, we could see between 20 and 25 percent of the sell through of 40-inch-plus with 1,080p resolution.”
Sales volume for the handful of 1,080p plasma displays that are planned for the second half will be relatively "insignificant," analysts predict, because most sales won't begin until the tail end of the year when more models become available.
Meanwhile, analysts say that to sustain heavy sales growth levels across the line, manufacturers will apply steep discounts on key screen sizes in both flat-panel and rear-projection models going into the holidays.
"Lucky for consumers, all the categories are going to experience big drops," says Pratt. "In [microdisplay rear-projection] prices for 50- to 55-inch product from tier-one brands may be as low as $1,599, and we'll see a few 60-inch products from tier two brands at $1,699 or below this fall.
"A potential tier-two price point of $1,699 for a 50-inch plasma display has been tossed around which would be very dramatic, not that the [tier-one brands] would follow, but the pressure would be on high for PDP and microdisplay manufacturers."
David Naranjo, DisplaySearch consumer electronics market research VP, forecasts prices to decline 17 to 34 percent year-to-year in the 40-inch and 42-inch flat-panel screen size segment in the fourth quarter.
"In the 50-inch [plasma] segment, we are projecting 20 percent to 30 percent year-to-year price declines for Q4 '06," Naranjo says. "In the 60-inch segment, we also expect year-to-year, double-digit percentage price declines in Q4 '06."
Current Analysis' Kovsky says he expects some of the promotional brands to pull out all the stops this year.
"We could see 32-inch LCD TVs going as low as $699 on Black Friday, and 40-inch models could drop down to $999," Kovsky speculates. "I've heard of plans to let go of 45- to 47-inch LCDs for as little as $1,299, though that's a stretch. I think low-end 42-inch plasmas could hit $799."
For the most part, manufacturers remain mum on their fourth-quarter pricing plans, but some have indicated that large-panel LCD screen sizes are the segment to watch.
"The efficiencies afforded by Gen 7 and Gen 8 LCD Fab's [panel factories] means that LCD pricing will be closer to PDP pricing than ever before in comparable screen sizes," says Sharp's Tripido. "LCD TV has rapidly moved into what was once regarded as the PDP space, and will likely overtake PDP starting this fall in comparable screen sizes."
Andrew Nelkin, Panasonic CE display group VP, whose company's aggressive price moves on plasma displays touched off a veritable price cutting free-for-all last year, said Panasonic, so far, isn't making any price moves, but he added that the company intends to aggressively protect its market leadership position in plasma if necessary.
Nelkin was unfazed by rumors that competitors may be planning to drop pricing on 42W-inch LCD TV models to 42W-inch HD plasma levels, adding that the performance advantages of Panasonic's plasma models will enable them to compete even if they are priced higher than competitors' comparably sized LCD models.
As for key screen sizes in the second half, Scott Ramierez, Toshiba TV products marketing VP, said 42W-inches will continue to dominate plasma, and 32W-inches will lead the LCD TV category. However, he said, more and more sales will be shifting to 50W-inches for plasma and 37W-inch for LCD TV.
"32-W inch LCD TV will hit very aggressive price points this year, taking share away from 26W. It's a very versatile screen size that can fit into any room in the house," Ramirez said.
Ramirez said he expects to see increasing growth in the sales of LCD TVs featuring built-in DVD players, where Toshiba is a dominant supplier.