LCD-TV Prices Increase as New Models Arrive and Promotions Fade
Prices of LCD-TVs surged upwards in July in the United States
, as brands and retailers introduced new models with enhanced features. They also slowed promotional activities designed to move older sets, according to
electronic display industry & market research firm iSuppli Corp.
The average retail price for an LCD-TV in the United States amounted to $1,136 in July, up 7.2 percent from $1,060 in June, the highest rate of increase in at least a year. The price also was up 2.8 percent from $1,104 in July 2009.
"While pricing often oscillates on a month-to-month basis, a year-over-year increase is unusual in the LCD-TV market, where annual price erosion rules due to falling panel costs and escalating competition," said Riddhi Patel, Director (Television Systems & Retail Services) at iSuppli.
"After small sequential declines in May and June, average prices for LCD-TVs increased in July with the arrival of a flood of new sets. More than 20 new models were added to each of the size ranges, with the majority of these models boasting improved features and functionalitiesas well as higher pricing. With these new models available, sellers cut back on deals designed to stimulate the sales of older LCD-TVs and reverted back to the regular prices."
Features in new LCD-TVs include LED backlighting, 3D display, higher frequencies such as 120Hz and 240Hz, and built-in Internet capability. Many of the new models also boast of larger display sizes.
Price trends vary by retailer
In July, price trends of LCD-TVs varied among different retailer types. For instance, prices at mass merchandisers and club stores declined on average on a sequential basis, while those at consumer electronics and online retailers saw increases. The price changes could be attributed to the brand and product mix at each retailer.
Some of the higher average price increases were seen at outlets like Amazon, Best Buy, Costco and Crutchfield; where an increased number of higher-priced premium models were available or added to the mix. In comparison, stores like Vanns, HHGregg and other regional chains experienced a slight price decline given their mix of new and older models, as well as the availability of older models on sale.
The factors that explain the reduced consumer interest in TV purchases among mass merchandisers and club stores are existing economic uncertainty and caution among consumers. Adding to their woes, promotions at these stores have been slower than the prior months. However, iSuppli expects retailers to become aggressive once again with their promotions in the upcoming months in order to stimulate demand.
Television sales soften
All over U.S., the
tv market is experiencing a softening in sales due to factors including seasonality, increasing prices for some key sizes and retarded consumer uptake given the economic uncertainty. In July, retail inventories rose and stood at six weeks to nine weeks on averageconsidered somewhat, high for this time of the year. in order to stimulate demand and the replacement cycle, brands and retailers will have to come up with aggressive promotions for the rest of the third quarter to generate excitement for the upcoming holiday season.
Learn more about U.S. television pricing trends with Riddhi Patel's new report, entitled TV Prices Rise as Promotions Fade Away' at http://www.isuppli.com/Display-Materials-and-Systems/Pages/TV-Prices-Increase-as-Promotions-Fade-Away.aspx
LCD-TV Prices Increase as New Models Arrive and Promotions Fade
By: Larry Wilson
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