LCD TV Prices to Drop Through the Holidays

by Doug Desjardins

If you missed out on Black Friday door-buster sales on high definition TVs don’t worry, because chances are even better deals lie ahead.

Analysts expect prices on plasma and LCD TVs to fall throughout the holiday season as retailers and manufacturers work to unload a glut of product that’s built up during the recession.

“The prices out there now are very aggressive and attractive, but there will be even further price reductions after Black Friday,” said Riddhi Patel, director of TV systems and retail services for research firm iSuppli. “The TV market has slowed down and there’s no indication that it’s turned around.”

After a rebound in consumer spending during the 2009 holiday season, retailers expected TV sales to pick up in 2010 but that surge never materialized. Paul Gagnon, director of TV research at Display Search, said manufacturers are finally to the point where they can’t hold off any longer.

“Manufacturers were playing a game of chicken, hoping demand would be there and reluctant to be the first one to let prices fall,” said Gagnon. “Only recently did they come to the shocking realization that prices needed to fall. That will have a good impact on holiday sales.”

Brian White, an analyst with Ticonderoga Securities, said LCD TV sales declined six consecutive months entering the holiday season, adding to what was already a glut of inventory. In addition to the recession, a high penetration of high-definition TVs in American homes also impacted sales. According to the Yankee Group, 56 percent of U.S. households now have at least one high definition TV.

But consumers shouldn’t expect a precipitous drop in prices. According to the NPD Group, the average price of a 42-inch LCD TV is currently $626 and is expected to fall below $600 during the holiday season before drifting back up in early 2011.

Recent trends also suggest budget-conscious consumers will pass on large screen sizes for more affordable mid-size TVs. According to Quixel Research, shipments of 32-inch LCD TVs increased 35 percent in the third quarter of this year.

“The 32-inch segment had the greatest impact on the LCD TV category in the third quarter,” said Quixel analyst Tamaryn Pratt. “With the average selling price below $399, the decision to purchase becomes a lot easier.”

But even great prices may not be enough to drive high definition TV sales. According to the Consumer Electronics Association, LCD TVs rank #7 on consumers’ holiday wish list this year, with products like laptops, iPads and video game consoles grabbing more attention this year.

“The iPad is going to eat into a lot of discretionary spending during the holidays,” said White. “People only have so much to spend and they just don’t want to buy TVs.”

Consumers looking for an even better deal should wait until 2011 to buy an LCD TV. According to iSuppli, the average price for a 32-inch LCD will drop from $374 now to $319 later next year.