TAIPEI, TAIWAN: According to WitsView’s 1Q09 LCD TV retail price survey, prices for the mainstream 19~52” segment declined by an average of 7.5 percent QoQ. The 22” and 26” witnessed the biggest declines, while the 46” and 52” fell the least.

In WitsView’s opinion, the bigger price declines in the smaller-sized segment highlight their growing popularity among consumers amid the economic downturn. TV brand vendors and retailers also believe demand can be better stimulated via price discounts on the smaller-sized segment.
LCD TV retail price outlook in 2009

Aside from the sales promotions, the LCD TV street price is also affected largely by the material cost and product spec changes. In 1Q09, the quarterly retail price drop reached 7.5 percent. Although this was less than the 8.9 percent quarterly decline in 4Q08, it still exceeded the 5.3 percent drop seen in 1Q08. This shows that the 2H08 panel price plunges helped sharply drive down the LCD TV material cost and the final retail prices. However, with panel prices expected to hit bottom in Mar09~Apr09, further sharp material cost downs will unlikely occur in 2009.

From a TV product spec standpoint, despite the global economic woes, Tier 1 brand vendors continue to add more value to their more premium TVs. LED backlights and 240Hz refresh rates will be the key highlights this year. Deemed as a premium feature last year, the 120Hz has now trickled down to the mid-end TVs. As the LCD TV has already passed the high growth phase, the addition of more high-end specs will be the key source in maintaining a higher ASP and revenue generation for TV makers.

Based on the current material cost and product specs, the LCD TV price drops in 2009 should be more moderate in contrast to 2008, where the average quarterly drop is predicted to be less than 5 percent. Nevertheless, given the higher price/inch of the 46” and 52”, growing supply from the Tier 2 makers and addition of new low-end products from the Tier 1 players, the two should still witness more notable price declines this year.

Small size: 19” lower than $300; 22” cheaper than 20”
Down by 7.7 percent QoQ, the 19” LCD TV fell past $300 for the first time. In the US, it slipped by 5.7 percent QoQ to $297. Meanwhile, in Japan it was retailed at $522, roughly the same as in 4Q08. In Korea and Taiwan, the markets do not appear to be placing high hopes on the 19”, as the model numbers of the two markets are fewer.

Separately, the 22” fell by 13.4% QoQ, the largest drop in our survey. This led to its price being lower than the 20” for the first time. In the US, most Tier 1 brand vendors have chosen selling the 22” over the 20”. By contrast, the adoption of the 22” is more fragmented in the UK. Sony and Toshiba currently offer 20” models only, while LG and Samsung supply just the 22” LCD TVs.

Middle size: 32” nears $600; 37” falls below $900
In 1Q09, the 32” tumbled by 9.5 percent QoQ to $605. In the US, prices slipped by 3.4 percent QoQ to $609. After the large sales promotions in 4Q08, the changes in the US average retail price grew smaller in 1Q09. Meanwhile, China recently launched its ‘Home Appliances to the Countryside’ policy, where a 13 percent subsidy is provided for TV purchases priced below RMB 2,000. The program has prompted several TV makers to try to include the 32” LCD TV, as well.

However, based on the current cost structure, it is still difficult to produce a RMB 2,000 (roughly $250) priced 32”. Nevertheless, China was still the cheapest region in WitsView’s survey, where the 32” was available for $521.

After falling below $1,000 in 4Q08, the 37” broke the $900 mark in 1Q09. Japan is currently the only market where the 37” is priced higher than $1,000. This is attributed to the release of many high-end models. Most of the locally made 37” LCD TVs support FHD. Meanwhile, Sharp’s 37” product lineup are all equipped with 120Hz refresh rates. Taiwan currently sells the cheapest 37” sets, roughly at an average of $739. Unlike Japan, most of the 37” models sold in Taiwan are supplied by local brands.

Large size: average 5.2 percent QoQ; 46” and 52” drops only slightly
The 40/42” was retailed respectively at $1,137 and $988, down by 4.4 percent and 7.2 percent QoQ. This marked the first time for the 42” to be priced below $1,000. The 40/42” are considered the most basic sizes of most brand vendors’ highend flagship products. For example, Sony’s W and Z series, or Samsung’s Series 7 are all 40” or above.

Posting the smallest price decline, the 46” fell by 2.5 percent QoQ to $1,689. In the quarter, 46” in the US ($1,457) is higher than the UK ($1,304) for the first time. Separately, the 47” declined by 7.2% QoQ to $1,524. Among the surveyed markets, the lowest average price of 47” was found in China. Priced at $1,042, it was only a third that of the sets sold in Japan.

The second smallest price decline was the 52”, where it was retailed at $2,264, down by 3.3 percent QoQ. In the US, prices fell by 3.7 percent QoQ to $1,778, while in Japan they instead rose by 7.3 percent to $3,163. China witnessed the biggest decline, where it fell by 12.2 percent QoQ. However, its $2,041 average street price was still higher than in the US or UK.