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Byline: Michael Rudnick

NEW YORK-Santa's bag better be big enough to hold an LCD or plasma television because prices are sinking fast.

Christmas shoppers will find that entry-level plasma televisions and smaller-screen LCDs are dropping in price from 20 to 25 percent this holiday season, compared with 2003. Prices will hit new lows with some plasmas skimming below the $1,500 mark, while LCDs can be had for as low as $500.

On the plasma television side, 42-inch enhanced-definition television plasmas are leading the charge. According to Stephen Baker, director of industry analysis with NPD Group, the average price for this entry-level plasma television in December is projected to be $2,400, compared with the $3,184 average for last December.

For consumers seeking to buy an EDTV plasma without breaking the $2,000 mark, they will be in luck this season, Baker said, noting that he expects to see prices as low as $1,499, thanks to tier-two brands produced by low-cost Asian manufacturers, including Westinghouse, Maxent and Daewoo.

Andrew Shulklapper, vice president of television market research at DisplaySearch, added 42-inch EDTV plasma price declines are also being driven by the introduction of private-label brands to this arena, including Best Buy's Insignia and Circuit City's ESA label.

More expensive LCD televisions will also see some price slippage this season, with the largest declines in 20-inch screen sizes, Shulklapper noted.

"What they [manufacturers] have scrambled to do now is produce smaller screen sizes, drop prices and kick-start activity for the LCD industry as a whole," Shulklapper said. "The 20-inch is a big enough size for second rooms at a price point that a much larger base can afford," he added.

Shulklapper projected the average price for 20-inch LCDs in the fourth calendar quarter of this year to hit $739, compared with the average $945 price for the same period last year.

In a category also being invaded by lower-cost manufacturers such as Viewsonic and Syntax, Shulklapper expects consumers to find 20-inch LCD TVs at prices as low as $599.

James Li, chief executive officer at Syntax, said that his company will reduce the price of its LCDs roughly 10 percent across all SKUs for the holiday season. For example, its 20-inch LCD television will be reduced from $599 to $449 and "bumped back up" to $499 after the holidays.

In response to the price drops, even established brands such as Sharp and Panasonic are offering 20-inch LCDs below $1,000, Shulklapper added.

"Smaller [LCD] screen sizes of 20 inches and below are under more pressure, as they start off at lower prices. We are seeing most competition from newer entrants," said Tony Favia, senior product manager for LCD televisions at Sharp.

Favia said that Sharp's 20-inch LCD models this holiday season range from $999 to $1,199, compared with $1,199 to $1,299 for last year. In June, Sharp launched Sharp-branded LCDs, a lower-priced alternative to the premium AQUOS line.

Going into 2005, Shulklapper said the greatest price compression will occur within larger 30- and 32-inch LCD screen sizes due to the introduction of Gen 6 and Gen 7 panel production facilities designed to manufacture larger screen sizes.

Shulklapper said that the average price of 30- and 32-inch LCDs was $3,215 in the third calendar quarter, which he expects to drop to $2,902 by the fourth quarter. He anticipates more dramatic decreases in 2005, noting that this size should average $1,606 by the end of 2005.

Retailers are also helping to push flat-panel televisions into consumers' living rooms with aggressive promotions this holiday season. "It is not uncommon to find 10 percent off promotions at big chains like Best Buy and Circuit City. Typically, all televisions over a certain price have been on sale for 5 percent off of the everyday price," Shulklapper said.

Consumers seem to be responding to these price declines. According to the Consumer Electronics Association's holiday forecast released last month, the plasma television is the top item on the consumer electronics wish list, while the LCD TV is ranked nine out of 10.
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Publication:HFN The Weekly Newspaper for the Home Furnishing Network
Geographic Code:1USA
Date:Nov 8, 2004

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