Average U.S. retail street prices for all LCD TVs up to 46-inch were less than $1000 for the first time in the fourth quarter of 2011, according to NPD DisplaySearch. All 32-inch TVs, including high frame-rate LED TVs, were less than $500. Other pricing milestones at the end of 2011:
• 40-inch and 42-inch CCFL 2D LCD TVs' average prices were less than $500 for the first time
• 40-inch active 3D (using shutter glasses) LCD TVs were less than $1000
• 47-inch passive 3D (using polarizer glasses) LCD TVs were less than $1000
• 60-inch LCD TVs were less than $1500, and some promotional prices were under $1000
• 50-inch 1080p 3D plasma TVs were less than $1000
The low street prices are the result of less-than-expected demand as well as too much production capacity. Oversupply of inventory in the first half of 2011 resulted in big drops in the cost of key components in the third quarter of 2011.
The market research firm said consumers liked the TV bargains they found at the end of 2011, and consumers are now accustomed to seeing rapidly and continually falling prices in TVs. That will be a problem for the TV makers. Most of the mid-2000s price reductions happened because of investments on production capacity, and there will be few opportunities for the industry to achieve such cost reductions in the future.
The industry, the research firm noted, had previously attempted to keep buyers focused on new technologies – such as 3D and faster frame rates – rather than on price. But the firm said consumers – particularly those in the United States – don't seem terribly interested in paying extra for premium TV features and more often upgrade their TV size for the same price.
The firm expects less price erosion in 2012.
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