Television price wars: Where plasma and LCD will go in 2009

We look at how the big-screen and small-screen plasma and LCD television markets will progress in the next year.

In 2008 the television markets for both plasma and LCD technology shifted dramatically. LCD television prices dropped 40 per cent in 2007 and this fall continued in 2008. However, the global ‘credit crunch’ led manufacturers to hold off on normal price drops and in some cases to raise prices across all models.

A pre-crunch September 2008 report by analysts at market research firm Gartner suggested retail prices would “fall rapidly under intense competition”, but the reality is markedly different. Major manufacturers such as Sharp and Sony announced price increases of up to 30 per cent on new models at the beginning of the year, while retailer discounting of older models has slowed after post-Christmas sales.

What does this mean for you? Gartner predicted that production of sub-40in models — the market dominated by the higher-resolution panels based on LCD technology — would rise, while production of larger panels will fall. In layman’s terms this means a move towards cheaper small panels, but models at the larger end of market will maintain their prices, if not rise.

That’s right — there’s never been a worse time to buy a big-screen TV. Gartner predictions are similar for plasma production, suggesting that retail prices did not fall during the second half of 2008 and that plasma televisions are now predominantly considered high-end products. Aimed at the wealthy end of the market and available in larger screen sizes than LCD televisions, prices for plasma televisions are not predicted to fall significantly in the foreseeable future.

This extends to even the best of the best. After Pioneer’s withdrawal from the plasma television market, the company announced continued warranty support of all models and predicted its final models would completely sell out by spring 2009 — thanks to “increased local demand” despite no plans to lower prices at all.

Gartner predicted that expanded production facilities would lead to lower plasma television prices. However, Panasonic’s decision to move all plasma panel production to only two plants in Japan effectively demonstrated the company’s response to lowering demand and difficult economic conditions. With less panels being produced, logic dictates that prices will rise and run-out deals will become scarcer.

It is likely that prices will slowly fall over the year as the global economy stabilises and production of LCD and plasma panels rises, but it is unlikely the Australian television market will see the same significant price falls that occurred in 2007 and early 2008.

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