Who Will Win The TV Display War This Xmas?

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The plasma market is heading for a shake-up as vendors roll out their latest offering in what could be the last roll of the dice for those several vendors who are struggling to make a profit. During the next three months consumers will decide the fate of plasma up against a new generation of LCD TVs.

And as costs are cut out of plasma models in an effort to compete with LCD TV, some vendors are now facing criticism for the quality of their new offerings despite the fact that they come with 1080p and 100Hz.

Last week one of Australia’s leading CEDIA member criticised the new Hitachi plasma offerings claiming that “We have been unable, despite several attempts to get the new Hitachi HD 1080p plasma models to deliver a quality picture which is a disappointment. Even the old Fujitsu models have a better picture than the current offerings from Hitachi,” they said.  They also claimed that the Hitachi plasma models had undergone three price cuts since being launched.

(With the Hitachi plasma models that SmartHouse has seen in the past we have been unable to establish any problems, however Hitachi has now chosen not to supply SmartHouse with models for review. We also have a record of interview with this CEDIA member who is among the most experienced in the consumer electronics market).  

Ironically, Fujitsu which is a victim of the plasma fallout has failed this year to deliver either 1080p or 100Hz models. The inventors of plasma Fujitsu sold their patents and manufacturing operations to Hitachi 2 years ago. Yet despite this several flat panel experts still claim that the old Fujitsu models are among the best on offer. However it appears that Hitachi which is also pushing into the LCD TV market with both traditional models and a new super thin model has not capitalised on the quality found in the early plasma models.

The CEDIA Member said, “Several vendors are struggling in the flat panel plasma market however the new Pioneer plasma range is stunning and will sell well it is among the best on offer. There is no doubt that plasma is a better big picture technology than LCD and if you look at the old Fujitsu models which we are still selling them deliver a suburb picture and are reasonable priced. It is a pity about the current Hitachi range”.

 

Analysts tracking the consumer television industry have said that the notorious US holiday weekend known as Black Friday will play a key role in determining whether plasma will survive. They also say that the upcoming peak buying period for flat panel TV’s will again draw aggressive pricing activity this year, although some of that will be directed at different screen sizes, display technologies and a broader selection of brands than in 2006. Hot segments to watch, they said, will be both LCD and plasma flat-panel models, in both 720p and 1080p resolution levels.

Most of the analysts queried, say they believe that plasma TVs in the 42-inch and 50-inch screen sizes will see the wildest ride, and some predict that heavy holiday promotions in the 50-inch 1080p plasma segment will go on to help the display technology fend off LCD TV advances in the larger screen sizes next year.

“Black Friday 2006 signified a passing of the torch from plasma to LCD at 42-inch,” said Sang Tang, HDTV research analyst with Current Analysis West, an NPD Group company. “This year, expect plasma to turn the tables on LCD. Plasma will be very aggressive at 50-inches and will maintain a foothold on the high-end market. In other words, there won’t be a flat-panel shakeout this year. LCD maintains its mass consumer appeal, while plasma takes the high-end market.”

“We expect to see healthy price reductions in plasma TVs from Q3 to Q4 as well as in 1080p LCD, as that is where supply is plentiful, and in the case of 1080p LCD and plasma, where margins are high,” said Ross Young, president of DisplaySearch, a market research firm that is part of The NPD Group. “We may also see some brands end the life of their 720p TVs and exclusively focus on 1080p, which could lead to some larger-than-usual [average selling price] declines in 720p.”

 

Riddhi Patel, iSuppli TV systems principal analyst, said, “The price war will be intense specifically at 40- to 42-inch levels. The competition will be not only between LCD and plasma but also between 40- and 42-inch LCD. Currently 42-inch LCDs are lower priced than the 40-inch LCDs. This is mainly because of the brand mix at each of these sizes.”

Tamaryn Pratt, Quixel Research principal, said to expect “significant price compression in 50-inch plasma (720p)” on Black Friday.

“For the top-tier brands we’ll see that prices will fall sinificantly depending on the feature set. Wider availability of larger-sized 40-inch-plus LCD TV is creating the majority of this price pressure,” said Pratt. “Huge” volumes will be done in the 40- to 42-inch LCD TV segment, she said, where 1080p will be an important factor.

As for which brands to watch for the heaviest activity this year, Patel said heavy price promotions will again come from all manufacturer levels ‘ both first tier (premium) and value second- and third-tier brands.

At the low end, Black Friday door-busters are likely to come from several bottom end vendors. At the high end, she looks for Sony, Samsung, LG and Pioneer and others to compete.

DisplaySearch’s Young said he expects at least some of the price-slashing activity to come from the manufacturers that control panel supplies ‘ Sony, Samsung, Sharp and Panasonic. “LGE also has ample internal LCD and plasma capacity and can make some major moves,” he said.

 

Pratt of Quixel said she has her eye this year on Sharp, which “is going to continue its full court press in the 52-inch LCD-TV space. They have factory capacity behind them and this is the time for them to take advantage of it while the other brands catch up.

“Samsung and Sony will also be significant in the 40- to 42- and 46 inch segments,” Pratt added.

At the top, “Panasonic and Samsung will continue to lord over the PDP category in sheer volume. Pioneer’s new Kuro line also seems to be generating momentum,” she observed. Toshiba will be somewhat of a wild card this year, he added. “Since leaving the plasma market, Toshiba has been very price aggressive with their LCDs, and I expect them to continue this push into the holiday season.”

DisplaySearch’s Young said: “With 40-inch-plus flat-panel TV prices falling the fastest, MD RPTVs will need to discount at similar rates to keep up.”

Pratt at Quixel warned, “The aggressive plasma TV pricing activity will cause a ripple effect that could impact the microdisplay [rear-projection] TV category ‘ not pretty.”

Tang at Current Analysis West said, “LCD’s screen size growth and price competitiveness have forced rear-projection TV and plasma to a more niche, high-end focus. In the high end market, 1080p was the value proposition RPTV offered over plasma.

“With plasma increasing its focus on 1080p 50-inch-plus sets, and offering competitive prices with them, rear-projection TV will be significantly marginalized in the high-end market. Any performance-related or screen size reservations are easily offset by its 1080p, thin form factor appeal.”

   

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