Shoppers See Bargains In Flat Panel LED TVs

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Now is the time to buy that flat-panel TV as LED-backlit LCD TV prices have dropped 44% between October 2009 and October 2010, and traditional LCD TVs have also fallen significantly in the same period, the NPD Group is reporting.

The average price of an LCD TV is $1,106, while prices for traditional LCD TVs have fallen 24% in the same period to $435.

A glut in supply caused by consumers waiting for holiday deals is the main reason for the price decline.

"This year, retailers will seek to offset several months of year-over-year flat-panel revenue drops driven by slowing price declines and rising household penetration," said Ross Rubin, executive director of industry analysis at NPD Group, in a statement. "While LED TV pricing is dropping more quickly than that of traditional LCD sets, LED-backlit models still command a significant price premium." LED-backlit sets use less energy than regular TVs and are generally thinner and have a better quality picture.

The market has also seen heightened demand for LCD TV panels in the first half of 2010, which are typically the most expensive part of a TV. After the economic downturn leveled off and the supply chain experienced product shortages, the panel prices led to slower than average retail declines in the first half of the year, according to DisplaySearch, an NPD Group company.

Profit margins have narrowed in the LCD TV category, leaving brands and retailers "somewhat at the mercy of the supply chain when trying to push retail prices lower," noted Paul Gagnon, director of North America TV Market Research at DisplaySearch, in a statement. This has led to a cooling of growth in some markets, including the United States, he said. "As often happens in such cycles, the resulting slowdown in demand for key components including LCD TV panels has once again shifted the supply chain back towards oversupply."

In the two most popular TV size categories, 32 inch and 40/42 inch sets, LCD TV panel prices were 10% and 5% lower, respectively, in the third quarter of 2010 than they were during the same period one year ago, DisplaySearch said. The decline will have an impact on retail pricing during the holidays, which could help increase demand, the firm said.