LCD Prices Rise in July, but Declines Likely in September

After declining or remaining stable for the past six months, the Average Selling Price (ASP) for LCD-TVs rose significantly in July and remained at a higher level in August, according to iSuppli Corp.’s TV PriceTrak service.

The increase mainly was due to the introduction of new LCD-TVs that are more expensive than older sets because of their inclusion of enhanced features like Light Emitting Diode (LED) backlights, an improved viewing experience and support for 1080p. According to iSuppli, the ASP was further bolstered by stabilization in the pricing for older-model LCD-TVs in August, ending a period of rapid declines.

For all sizes of LCD-TVs sold by premium brands in June, the ASP was $1,799. In July, prices increased because of the addition of new models, rising 7.4 percent to reach $1,933. In August, brand and retailer promotions on some models and new model introductions continued, keeping prices stable at an average of $1,931.

“Unfortunately for LCD-TV brands — but fortunately for consumers — this is only a temporary phenomenon,” says Riddhi Patel, Principal Analyst for iSuppli’s television service. “Prices are set to begin declining again in September and will continue to do so in the fourth quarter, even in the peak selling season during the holidays.”

According to Patel, the major competitive battleground for LCD-TV brands in 2007 is the 40/42-inch market. New 40/42-inch model introductions are arriving at a rapid pace as this product has become the sweet spot for LCD-TV vendors, offering the best combination of pricing and volume.

“Besides price, the key to success for brands in the 40/42-inch space is aggressive marketing,” Patel says. “Brands are in a fight to obtain the best shelf space and to get visibility in all sales channels. To gain an edge in these battles, brands must make effective use of marketing.”

For more information from the report, visit www.isuppli.com.