Big-screen TVs expected to sell well this holiday season
KANSAS CITY, Mo. - Bargain-basement prices on high-end electronics will be the norm during the holiday shopping season. Sale prices on consumer electronics gear should be 35 percent or more under 2007 levels, according to industry projections. Nowhere will those deals be more evident than in the big-screen TV aisles.
Manufacturers last summer geared up for an expected major holiday season, an action that preceded much of the economic collapse. Now there are plenty of big screens in the pipeline, and potentially not enough buyers.
"Most retailers and manufacturers have a strong sense of urgency to put the best deals out there," said Paul Gagnon, director of North American TV research for market intelligence firm DisplaySearch.
Already, 42-inch flat-screen TVs that sold for $1,500 a year ago are selling at or below $1,000. Retailers and manufacturers with too many products to sell and too few shoppers in their stores could push prices even lower. A shorter-than-usual holiday shopping season sparked by a late Thanksgiving is adding to the mix.
Like last year, big-screen television sets - generally defined as a screen 32 inches or larger - are expected to be the hot item this Christmas. Sparked by the down economy and lower prices, the hottest of the hot will be 32-inch LCD sets. About 25 percent of us will opt for that size, according to industry projections.
The Consumer Reports holiday shopping poll released last week projected that 23 percent of consumers plan to buy a big-screen TV either before or after the holidays.
Despite job concerns, the depressed stock market and the increasingly weak economy, U.S. retailers are expected to sell more than 10 million such sets during the last three months of the year.
While that may sound like a healthy number, it's down from the 11.6 million projected in August by DisplaySearch, and also well below the 11.5 million sets sold during the 2007 holiday season.
One event is key in that expected $8 billion-plus buying spree: In February, television broadcasters will shut down their analog transmitters and switch to digital programming.
While cable and satellite TV customers aren't affected by the changeover, and a government giveaway program offers coupons for just-about-free converter boxes for over-the-air TV viewers, many consumers are using the changeover as an excuse to upgrade their TVs.
The sets offer high-definition viewing experiences that provide a far better picture than the analog sets that have been in consumers' homes for decades.
"People are going to buy a lot of them despite the economic issues," said Stephen Baker, a vice president for The NPD Group.
"There's still going to be robust volume compared to every other consumer electronics category."
There are several TV technology options on store shelves, but most consumers will focus on only two: LCD or plasma.
LCD - short for liquid crystal display - dominates a market that includes plasma screens, front projection, rear projection and an up-and-coming-technology called OLED (organic light-emitting diode).
LCD sets outsell plasma sets by more than 6 to 1.
That doesn't mean plasma is on its way out, said Baker of NPD.
"Plasma is here to stay. It has strong brand backing," he said.
The two technologies have different strengths, but many of the differences that were evident only two years ago have evened out.
In general, LCD screens tend to be brighter and use less electricity, and are available at competitive prices in both smaller and midrange screen sizes.
Plasma screens generally offer better color reproduction, and darker scenes tend to be better defined. Larger screens often are less expensive than comparable LCD screens. But they also generally are heavier and thicker, and use more electricity.
"From my perspective, when you walk in the store, it's hard to tell the difference," Baker said.
Like the technologies themselves, prices have evened out. Plasma screens, at one time the more expensive technology, have gotten cheaper as manufacturers compete for market share with LCD manufacturers.
While big-screen TV prices have dropped dramatically in the last two years, the overall price of television sets has gone up as consumers have moved from the relatively inexpensive cathode ray tube technology to digital displays.
In December 2006, Baker said, an average TV cost $588. In September of this year, the average was $801.
"The last couple of years have certainly changed people's mindsets about what you should pay for a TV set," Baker said. "People's willingness to spend $2,000 has really gone up."
Size matters: Don't buy a TV too big, or too small, for the room. Contrast, resolution and other issues come into play, but generally don't buy a set larger than about 42 inches if you're planning to sit within six feet of the screen. Conversely, look at sets larger than 42 inches if you're planning to sit 10 feet or more away.
Picture quality: Picking out the set with the best picture quality in a bright showroom - where a set's brightness has been turned up to the max - makes determining picture quality difficult. Paul Gagnon of DisplaySearch recommends that consumers focus on color performance. "If the skin tone looks natural, you can bet the rest of the color performance is going to be good."
Timing the deal: Consumers who didn't buy on Black Friday are likely to find the best deals the week before Christmas. Depending on manufacturer inventories, there also may be deals shortly before the Super Bowl and before the analog digital changeover on Feb. 17.
Paying for the deal: Whether you buy at a specialty TV retailer, electronics retailers such as Best Buy, big-box stores such as Target or Wal-Mart or online, crunch the numbers to make sure you're really getting a good deal. Is that deep discount online really going to save you money if you're going to be paying credit card interest on it for months? Or would paying a slightly higher price to a retailer offering no- or low-interest financing work out better for your wallet?
Beware of "specsmanship:" Perhaps more than any other area of consumer electronics, the big-screen TV aisles are marked by confusing numbers and acronyms. Most are designed by manufacturers to differentiate one really big TV from another really big TV. Some of those acronyms and numbers are worth considering. Others are more or less worthless.
720 versus 1080. Speaking of specsmanship. The numbers refer to resolution, and both offer a far better picture than your old analog TV. Sets offering 720p resolution offer fewer lines and pixels than sets offering 1080i resolution. However, technology evens out even those numbers. The "p" in 720p stands for progressive scan, which offers a sharper moving image. Confusing the matter further are high-end sets with 1080p, which offers the best of both worlds. Be warned, though, that TV networks aren't broadcasting in 1080p, and the only technology that makes use of the format is Blu-ray, the discs that offer movies in high definition.