Premium LCD-TV brands cut pricing gap

EL SEGUNDO, USA: Premium LCD-TV brands offered aggressive promotions for Black Friday in the United States that cut their prices close to the levels of their value-oriented competitors, according to iSuppli Corp.

“Premium brands led the way in terms of US Black Friday LCD-TV pricing deals,” noted Tina Tseng, analyst, consumer electronics channels, for iSuppli. “Average prices for LCD-TVs advertised by premium brands in advance of Black Friday were 23 percent lower than their average in mid November. In contrast, value brands reduced their prices by only 19 percent during the same period.”

Tseng noted that the price differential between premium- and value-brand pricing for 32-inch LCD-TVs has dwindled to as little as $61. The lowest price found on a premium brand 32-inch LCD-TV on Black Friday was $449.99, compared to $388.99 for the value names.

Comparison of Lowest-Advertised Premium and Value Brand LCD-TV Pricing on Black Friday in the United States (Pricing by Screen Size in US $)

Source: iSuppli, December 2008.

The premium brands also led in terms of price reductions for LCD-TVs larger than 42-inches in the diagonal dimension.

With the ongoing economic situation, U.S. consumers have scaled back on big-ticket item purchases, such as TVs, in the past months. To spur demand and to clear up existing inventory, brands and retailers will likely maintain their Black Friday specials for the remainder of the holiday season and into 2009.

The dwindling price differential could be a long-term trend, according to iSuppli. This could impact sales at the value brands as consumers start to take premium names into consideration when their price gap with similarly featured value-brands sets are within the $50 to $100 range.

The figure presents a comparison of the lowest-advertised premium and value brand LCD-TV pricing on Black Friday in the United States.

Premium vs. value
The ranks of the premium LCD-TV makers include marquee names such as Sony, Samsung, Philips, Sharp, LG Electronics and Toshiba. Value players include Vizio and Westinghouse.

Beyond pricing, the major differentiation between the LCD-TVs sold by the two camps is in the features, such as support for 120 Hertz (Hz), wireless connectivity and newer aspects that improve the overall look and feel of the product, such as thin bezels and slimmer profiles, according to Riddhi Patel, principal analyst, television, for iSuppli.

For several years, the market has been clearly delineated between the premium and value brands. However, in recent years, premium names like Samsung and Sony have rolled out value lines of basic-featured LCD-TVs that are more price competitive with the value brands. Conversely, leading value brand Vizio has rolled out a premium LCD-TV line with advanced features like the 120Hz screen refresh rate while still maintaining its price advantage.

Hertz so good for LCD-TV makers
The newer 120Hz panels refresh the images on the screen faster than conventional 60Hz sets, allowing LCD-TVs to present video with smoother motion, a particular advantage for viewing sporting events.

As LCD-TV makers have attempted to promote sales of 120Hz sets, availability has risen, with more than 480 LCD-TV models sporting this feature in November 2008, up from 290 a year earlier.