The price differential between liquid crystal display televisions (LCD TVs) sold by premium brands and value brands is narrowing as marquee nameplates vie to capture a wider consumer base by offering less expensive models, according to iSuppli Corp.
The lowest price in April for a 40-inch premium-branded LCD TV was $900. The lowest price for a 40-inch LCD TV offered by a value brand was $615. Comparable 42-inch premium and value brand sets were priced at $955 and $798 respectively. This narrow price gap makes the premium brands very competitive with value alternatives.
“The rising popularity and growing consumer comfort with value brands like Vizio is prompting premium competitors to offer cheaper LCD TV models in the 40-inch and larger sizes,” said Riddhi Patel, principal analyst, television, for iSuppli.
But while price is an important consideration for consumers when selecting an LCD nTV to buy, it’s not the most important factor.
“Consumers’ No 1 consideration when buying a new LCD TV isn’t price, but picture quality,” Patel said. “Price is secondary. So even if premium and value brands reach price parity, the dominant factor will still be which television actually looks better to the naked eye,rather than the price on the tag. Obviously, in a perfect world, that would even the playing field. But when it comes to consumer electronics, it is anything but even. Brand recognition is an important asset for any company. Who would choose a nameless Taiwanese or Chinese brand over a Sony Bravia or a Samsung?”
However, there are exceptions to this rule. For example, U.S.-based Vizio has achieved remarkable success as a premium alternative brand built from the ground up.
According to iSuppli’s Television Market Tracker Service, Vizio surged to the top spot in the U.S. and Canadian LCD TV market in the first quarter.
Vizio’s lowest Average Selling Price (ASP) for a 42-inch cold-cathode fluorescent lamp (CCFL) backlit, 60Hz refresh rate, full High-Definition (HD) LCD TV was $850. In comparison, Samsung and Sony 40-inch LCD TVs with the same configurations carried ASPs of $1,000 and $1,090, respectively.
While the Premium brands now are offering less-expensive LCD-TVs, they continue to produce higher-end models with up-to-date features.
Average LCD-TV prices in April in the 40-inch and larger screen sizes increased by 3 percent on a monthly basis, despite drops for the older models, as premium brands continued to introduce more full-featured sets in the larger sizes during the month.
Samsung in April introduced more Light Emitting Diode (LED) backlit models, including the 8000 series. Prices on these high-end models in the 40- to 49-inch segment range from $2,500 to $4,000, varying by brand and size.
“The premium brands’ dual-pronged strategy of offering high- and low-end models can help them to maintain market share amid the rise of Vizio,” Patel said.
Beyond LED backlights, LCD TVs capable of viewing Internet videos and web content also are showing up as a new feature for televisions, mainly on the premium brands.
iSuppli expects average LCD TV selling prices to decline slightly in the coming months, as brands and retailers roll out with promotions for the upcoming “Dads and Grads” season. However, average list prices likely will remain flat as more new models are added to the product mix. In general, current inventory levels at the retailers are at a healthy five to six weeks.
For more information, visit www.isuppli.com