Polaroid 15 Lcd Tv

In recent weeks, prices for flat-panel television sets have been falling sharply in a round of heavy discounting that wasn't expected to begin until much later this year.

The price cuts could trigger a significant shift in the country's adoption of flat-panel sets, which first hit stores five years ago and last year accounted for only about 15 percent of TV sales in the United States. While all consumer electronics tend to fall in price over time, most new products experience a period of steep declines right before they become mainstream items. DVD players plunged to below $300 from $700 in 1998, for instance, and digital cameras went through a similar tumble in 2002.

That same tipping point may be at hand for flat-panel TV sets, particularly in 20- to 32-inch screen sizes.

Forecast: Soon, even cheaper

Circuit City sold a 20-inch Polaroid LCD-TV for $450 over the Memorial Day weekend. Comparable models sold for $900 to $1,200 in December. Costco is offering a 30-inch Sceptre LCD-TV for $999, half the $2,000 price that was common for that size just a few months ago. Dell is selling a 26-inch LCD-TV for $1,199, down from $1,499 in December.

The first signs of the latest price decline appeared about nine months ago. That was sparked by the opening of a number of new factories in Asia, where the vital components for flat-panel sets are produced.

The companies that build the panels -- such as Samsung Electronics, LG Philips LCD, and Matsushita Electric Industrial -- have invested more than $20 billion in the new plants in the last two years. The plants are able to use larger sheets of glass than in the past -- sheets that now are as big as a queen-size bed -- to cut the thin screens that then are incorporated into flat-panel TVs. It is far more efficient for makers to use larger glass because they can make more screens from each sheet.

Instead of using old-style tubes, flat-panel TVs create pictures in other ways. There are two varieties: Liquid-crystal displays, or LCD sets, create pictures by affixing liquid crystals to thin sheets of glass. Plasma screens generate the pictures by electrically charging dots of special gases on the glass. LCD sets tend to be thinner and lighter than the plasma machines but also more expensive. Because there are more points of light, viewers of flat- panel TVs get a much crisper picture.

The steep price cuts are affecting both kinds of sets. But they are greatest on TVs in the 20- to 27-inch range, which account for the bulk of TVs purchased, both traditional and flat-panel.

Prices of larger flat-panel TVs, while also falling, aren't likely to experience the cliff-like drops until later this year or next, when another set of factories opens to boost output for those sizes. One significant development to watch for: when the price for a 37-inch plasma TV falls below $1,000. Such models are now in U.S. stores for around $1,500.

About 10 million flat-panel TVs were sold worldwide last year. A year ago, analysts expected that number to increase to around 35 million in 2008, but they have since revised their forecasts upward, to more than 40 million.

The current price declines are expected to accelerate during the next four years. With LCD TVs, for instance, the average sales price will fall more than 25 percent annually in 2007, 2008 and 2009, compared with a 3 percent decline this year, according to research firm iSuppli.

Digital signals, new DVD type

The proliferation of flat-panel TVs comes amid efforts to boost the picture quality of the programming as well. The spread of digital broadcast, cable and satellite services is bringing more high-definition video into the home. These services offer a clearer, richer picture than what is currently the norm for TV.

At the same time, a new type of DVD -- if manufacturers can reach an agreement on the technical standard -- will permit the sale of pre-recorded movies and programs in high definition. All of this should boost demand for flat-panel TVs.

In both regular and flat-panel TVs, prices are higher for models that have the capacity to show high-definition pictures. For instance, a 37-inch plasma TV that shows high-definition pictures now costs $2,999 at Best Buy, about twice what other retailers are charging for the same-size model without high-definition capability.

More LCD than plasma TVs are classified as high-definition models because the liquid-crystal technology allows more pixels, or points of light, to fit on the screen. As LCD screens get smaller than 30 inches in size, it gets harder for the human eye to differentiate between standard and high-definition pictures because pixels are so close together anyway.

Wall Street Journal

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