Digital TVs: More screen for less green
With prices for high-end TVs dropping, a 50-inch plasma, LCD or projection television set may be in your future.
What cost $25,000 just a few years ago can be had for a tenth of that, thanks to increased manufacturing capacity at factories devoted to building the whopper, high-tech TVs; improved manufacturing processes that are cutting down on mistakes; and cutthroat pricing from the likes of Dell.
While the $1,000 barrier may still be a way off, digital TVs that are 40 inches or larger when measured diagonally are expected to see the biggest price cuts in the near future. Some analysts estimate that costs for certain models could be down as much as 41 percent from last year by the holidays.
What's new:
Prices for digital televisions are expected to fall soon thanks to improved technology and less expensive components.
Bottom line:
These days, consumers are faced with lower prices--and more choices--when looking for digital televisions. Knowing where to shop and what to look for could save shoppers as much as 41 percent.
But the overabundance of TV types, technologies and terminologies has made it difficult for many consumers to decide between LCD (liquid crystal display), rear-projection DLP (digital light processing) and plasma televisions.
The good news is consumers can spend less green for more screen. But they should know what they're buying first.
Why are prices expected to fall noticeably in the next few months?The short answer is "sports." More manufacturers and retailers drop their prices between August and November than any other time of the year, according to IDC analyst Bob O'Donnell.
Major League Baseball playoffs, the start of the National Football League season, the return of National Hockey League and other major sporting events are prompting sports fans to get to that purchase before next year's Super Bowl, and retailers are tying special sales to the sporting events. Look for additional price drops before the 2008 Summer Olympic Games in Beijing, which are expected to be broadcast in high-definition.
Will other factors keep prices dropping after the holidays?Definitely. Increased manufacturing capacity at factories is allowing vendors to make more TVs and lower their prices.
Shipments of LCD TV panels are expected to reach 18.8 million worldwide this year, up 87 percent from the 10 million shipped last year, according to industry analysts at iSuppli.
And DLP projection televisions (a type of TV that uses a digital light-projector chip to put the image on-screen) are also on track to exceed the 20,000 units shipped in the second quarter of 2005, according to DisplaySearch.
What kinds of digital TVs are likely to see the biggest price drops?While all kinds of digital TVs should see significant price reductions, a 42-inch LCD should bring the biggest bang for the buck, according to DisplaySearch. The research firm estimates that the average price could go as low as $2,800 by the end of the year. That represents a 41 percent savings over last year's prices. The price of 40-inch to 42-inch LCD panels, a key component of the TVs, fell to $950 last month--the first time such devices have cost less than $1,000.
DLP and plasma display prices have dropped at least 20 percent over the last year and will keep dropping in coming months. Prices for a projector television in the 50-inch category now go as low as $1,170, according to StreetPrices.com. Similarly, prices for plasma televisions could drop to $2,800. That could appeal to consumers who were looking at plasma television prices of more than $10,000 just a year ago.
Who has better deals? Electronic stores or online retailers?Buying a digital television online instead of in a retail store can save consumers as much as $1,500, said IDC's O'Donnell. Lower operating expenses, less expensive warehouses and fewer sales staff all give online outlets like Amazon.com the best chance at lower prices.
Still, buying a $3,000 display sight unseen can be daunting, O'Donnell said. Even Dell has set up kiosks in shopping malls to let consumers get a closer look at the company's products.
Who are the biggest names in this business, and who are the big price cutters?Samsung, Sony, Pioneer, Hitachi, Toshiba, LG Electronics, Matsushita Electric (Panasonic), Sharp, JVC, RCA and NEC dominate store shelves. Lesser-known manufacturers, which could put pressure on the big guys to cut prices, include Akai, Daewoo, BenQ, Planar, ToteVision, Jwin and Electrograph.
Then there is the Dell effect.
Dell currently sells two categories of digital televisions--19 inch to 26 inch and 30 inch to 42 inch. But the company is preparing to sell larger sizes in September.
In a recent interview with CNET News.com, Dell CEO Kevin Rollins predicted Dell's prices for big-screen digital televisions eventually will drop below $1,000, which would put plenty of pressure on consumer electronics giants such as Sony and Samsung.
Are manufacturers getting better at making these TVs?No doubt, and that's bringing down prices. Russ Johnston, a senior vice president of marketing at Pioneer, said factory mistakes at his company were down as much as 40 percent from a few years ago. Because of that and lower component prices, Pioneer has been able to drop prices by as much as 30 percent every year since 1998, when it sold a large-screen television for $25,000. These things are nice-looking, but are they durable?
While all televisions and displays degrade over time, IDC found the plasma variety only lost about 5 percent of their performance when subjected to accelerated aging tests.
Many plasma TV vendors now claim 60,000-hour lifetimes. That's eight hours of television every day for more than 20 years before the screen reaches half of its original brightness. But true duration tests will take several years to conduct.
What about dead pixels and plasma burn?One of the more common concerns with plasmas is problems with residual pictures staying on a screen when the television is turned off. That was especially true of early generations of plasma TVs, according to IDC.
Even with more modern machines, IDC found clearly visible images from a video game menu after a 48-hour torture test of three plasma TVs. Similar tests with the LCD and DLP rear projection sets showed no image retention. However, after regular video material (a DVD movie set to continuously loop) was played through the sets for 24 hours, the image completely disappeared from all three plasmas, leaving no trace.
Dead pixels--malfunctioning electronic dots among the millions that make up a typical display--are also becoming more of an issue, partly because consumers have high expectations for the quality of digital television.