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Flat-panel TVs reaching sales mark

Early indications show sales of flat-panel sets meeting expectations despite a slower-than-expected holiday shopping season.

The desire to own a sleek flat-panel television is driving modest sales in an otherwise slower-than-expected holiday shopping season, according to analysts.

This holiday season, manufacturers had high hopes for flat-panel sets, such as those based on plasma or liquid crystal displays.

"In general, things are still a little slower than manufacturers would like, but they are meeting expectations," said Paul Semeza, vice president of display and consumer research at iSuppli. "They aren't taking off, but they aren't down either."

Semeza said that sales data is still trickling in and that he will have a better sense in the first quarter of how flat panels fared this holiday season.

About 40 percent to 45 percent of all televisions are sold in the fourth quarter, according to research company DisplaySearch, so the holiday season is especially important to this emerging business. Many manufacturers and retailers are counting on the new technologies to remake the television business, which for 50 years has used cathode-ray tubes as the basis for sets.

Through a combination of sleek cases, large display sizes and marketing blitzes, retailers and manufacturers are hoping to create a new era for televisions. So far, consumers have been biting but are not necessarily being reeled in. High prices have been a significant deterrent. Average selling prices of flat-panel sets are around $1,500 to $1,800. Traditional CRT sets are in the sub-$500 range.

Average selling prices will continue to fall, however. On Tuesday, LG.Philips LCD, one of the leading manufacturers of liquid crystal display panels, said further price drops will occur in 2005.

Ross Young, president of DisplaySearch, agreed but said price drops will be at a slower rate than in 2004.

The new sets are still a small factor in the overall television market. Accounting for about 70 percent of television shipments, CRT sets still make up the lion's share of the industry. However, growth rates in shipments of flat-panel sets are more than doubling each month in the fourth quarter compared with last year, according to the Consumer Electronics Association.