Pricing Wars Could Lead Discount TV Brands in the Dust

As the price of flat-panel TVs continues to come down to jaw-dropping levels, we're seeing signs that the value brands, which often managed to take a significant chunk of the pie because of their cost advantage, are now feeling the heat. Why? Because the name brands have reduced pricing to a point where they're often times actually in line with the value brands!

Research firm iSuppli reports that, during Black Friday weekend in the U.S., premium TV brands like Sony, Samsung, and LG, advertised pricing that was 23% lower than their average, while value brands like Vizio and Westinghouse reduced pricing by only 19%. Continuing on to today, Tina Tseng, an Analyst for the consumer electronics channels at iSuppli, says that the price differential between a 32" premium and value-branded LCD is just US$61. For an extra $60, would you opt for the brand name model over a lesser-known brand? Things probably won't be changing much any time soon either, as retailers scramble to move product during these difficult times.

So what does this mean? Will the value brands be obliterated by the premium models? On the flip side, however, how much money are the premium brands losing by selling products for prices that are essentially almost at cost? While the consumer comes out on the winning end of this stick, the business situation surely can't sustain itself like this for any great length of time.

It will be interesting to see how things pan out once the crazy pricing wars, not to mention the recession, come to an end. Stay tuned.

Plasma Reaches Less Than $600

Vizio is offering a 32", 720p plasma TV through U.S. Wal-Mart stores for less than US$600, further proving just how competitive the flat-panel TV arena has become. Additionally, the manufacturer is selling a larger, 42" model for just $200 more.

Has the $600 pricing decision been made because of the stronghold that LCD technology has on the 32" flat-panel HDTV market? After all, in Q1 2008, research firm DisplaySearch reported that 32" LCDs dominate the market, representing more than 40% of total LCD TVs shipped. Indeed, it looks this way since Vizio is also launching new LCD TVs for more reasonable pricing: $1,499.99 for a 42" 1080p model and $1,899.99 for a 47" model. If Vizio is looking to help plasma increase marketshare in the 32" category, these aggressive pricing can surely help.

It's mind-baffling to think of a company essentially "blowing out" plasma TVs. How will this bode for the category as a whole? DisplaySearch indicated for Q1 2008 that, although worldwide plasma shipments grew 53% year-over-year (Y/Y) to reach more than three million units, they have shown a quarter-over-quarter (Q/Q) drop of 19%. Interestingly, 32" plasma panels actually rose 4% in the first quarter of this year to account for 15% of the market. Will Vizio's new sub-$600 plasma, which is already available in all 3,400 U.S. Wal-Mart stores, take a huge bite out of LCDs 32" pie?

Indeed pricing in the plasma category (and arguably LCD) has been dropping to meet both consumer demand and the increasingly competitive landscape. There's no doubt that a $600 plasma from Wal-Mart won't do anything to help the price erosion crisis.

And to think that just a few years ago, plasma TVs were products for just the elite of society, costing in the thousands and thousands of dollars...