Plasma TV on the rebound?

Overall TV shipments are better than a year ago. But plasma increased more than 50 percent thanks to the introduction of 32-inch sets.

Erica Ogg Former Staff writer, CNET News
Erica Ogg is a CNET News reporter who covers Apple, HP, Dell, and other PC makers, as well as the consumer electronics industry. She's also one of the hosts of CNET News' Daily Podcast. In her non-work life, she's a history geek, a loyal Dodgers fan, and a mac-and-cheese connoisseur.
Erica Ogg
3 min read

It appears the TV industry's self-prescribed medicine of pushing smaller flat-panel sets is working.

The second-quarter check-up is in, and the industry is in far better health than a year ago. DisplaySearch's Quarterly Global TV Shipment and Forecast Report was released Thursday, and worldwide TV shipments increased 11 percent from the same period in 2007, but just 3 percent from first quarter of 2008.

LG plasma
LG Electronics

Still, the news is encouraging to an industry that was wringing its hands back in March over running out of places to sell its rapidly maturing, but still-pricey sets.

Around that same time, some of the bigger tier-one manufacturers began pushing smaller screens in an attempt to attract buyers who might be tightening their budgets as gas and food prices rose.

Vizio made a splash with its 32-inch plasma, a size that hasn't been available in that technology in the U.S. for a while. Even the big guys like Panasonic, LG, and Sony and Samsung were going small: 32, 40, 46 inches.

"Sony and Samsung launched what we termed 'fighter models,' because they were designed to reach new pricing lows," said Paul Gagnon, who monitors the TV industry for DisplaySearch. Vizio's smaller plasma was specifically launched "to blunt the impact" of Samsung's and Sony's moves into smaller-and-cheaper sets, he added.

Vizio's 32-inch plasma sells in club stores for about $550, while Samsung and Sony's 32-inch LCDs each retail for $699, the lowest price each has ever offered for that size TV.

The result has been a resurgent plasma TV business. DisplaySearch is reporting that shipments of plasma worldwide increased 52 percent from the same quarter a year ago, or 3.4 million units. That's way behind LCD TV shipments, but it's encouraging for a technology that many of the biggest vendors had basically left for dead.

Plasma shipments are on the rise everywhere, but they are particularly healthy in China, where they rose 285 percent in the last year.

To be sure, LCD TVs are still the new television of choice for most. LCD shipments jumped 47 percent in the last year to reach 23.7 million units (compared to plasma's 3.4 million units) in the second quarter worldwide, DisplaySearch says.

Despite LCD's established presence in many North American living rooms, it appears that the introduction of smaller sizes and lower prices are helping retailers to move plenty of product. Last year, LCD shipments to the region were dropping. But second-quarter shipments increased almost 30 percent from a year ago.

And LCD prices have still been dropping more quickly than plasma. With major shopping opportunities like Labor Day, the beginning of football season, and Black Friday fast approaching, plasma's recovery could be brief.

Sony and Samsung tend to set the pace on price reductions, and Gagnon of DisplaySearch says the other brands will all react in order to maintain their brand position in the market. If Samsung drops its 42-inch LCD $100 in the coming weeks, expect Panasonic to do the same on its 42-inch plasma.

But it doesn't appear there are going to be bold moves on the part of plasma to steal some more share and get ahead. For all the brands, said Gagnon, "it's all about maintaining price differential."