11/27/2010

You might want to wait until next year to buy an LCD TV

Black Friday has come and gone this year, and if you did not purchase a big-screen LCD, then you’re an informed consumer or you already have one. Better deals are expected to come later on this holiday season and into the beginning of 2011. This quarter, the average price for a 42” LCD TV is approximately $626. However, the price is expected to drop below $600 by the first quarter of 2011 and prices for 52” LCD TVs are expected to decline by about $120. Why the drop in prices you ask? Well, the TV market has been relatively sluggish and there are really no indicators signaling a comeback anytime soon. Sales for LCDs have been declining for six consecutive months, so I guess you could say we’re experiencing an LCD TV recession. Economists are saying the scarce demand for LCD TVs is somewhat attributable to an increased saturation of flat screen TVs in homes across the country. Over the past five years, sales for flat-screen HDTVs have surged, and now about 56 percent of households in the US have at least one HDTV. Since most people already have an LCD TV, there is less motivation to purchase new ones, even with tremendously low price tags on the most monumental shopping day of the year. So instead of TVs, was projected that Apple’s iPad and Microsoft’s Kinect for Xbox 360 will be the hottest items for this year’s Black Friday extravaganza, the numbers will be reported soon.

4 comments:

walla walla said...
This comment has been removed by the author.
walla walla said...

Assuming this information is true and that HDTVs are now the hot TV item, I question what I would strategically do if I were an LCD proprietor. What is the best strategy for maximizing profits while minimizing my inventory of the less desirable LDC products? Per the article, it appears that LDC manufacturers are lowering their prices in an attempt to capture more market share and reduce their inventories. My question is if they could do something else? Is lowering prices always the best solution? How about product bundling or marketing the item in foreign countries where typical citizens could not afford an HDTV?

Vladimir said...

I found this article interesting just because I am in the market for a new TV right now.
I decided not to buy this year because I saw all the new technologies that just appeared on the market, and I didn't what to purchase an outdated LCD TV. Now, we have 3D and LED technology in the TV market. This new technology has decreased the price of the standard LCD TV. It has also caused a negative shift in the demand curve because consumers are now demanding newer technology.

Dave said...

iPoser: compared to what?

The price of technology falls because the marginal benefit it can offer is being driven to zero by even newer technology. Without some idea of how fast the marginal benefit is dissipating, I'm not sure we can say too much about the importance of marginal price drops.

For my part ... I just want my old TV to break before I get a new one ... otherwise my own neuroses will bug me too much ;) I'm not as strategic about it as Vladimir.

And yikes Walla Walla ... isn't this the $64K question? If it was understood how to do this, electronics retailers wouldn't go out of business so much. Go forth and figure it out ... and donate some of your well-gotten wealth back to SUU!