2007: When to Buy Your HDTV?

One of the most frequent questions I get is “when is the best time to buy an HDTV?” I’ve mentioned this already recently, but I want to give a more detailed explanation of my thoughts on this thorny question.

Note that this forecast is an informed guess, but it’s still a guess. Here’s how I see things playing out. The manufacturers have been building a lot of product, encouraged by the fact that prices have stayed fairly constant over the summer. (Prices for some models have declined sharply, but that was largely the typical result of an older model being replaced by a newer one.) Some retailers such as Circuit City and Tweeter have not had a good year; this holiday buying season is going to be a make-or-break time for many of them, and they’re counting on HDTV sales to carry a large part of the load. Best Buy has already stated that they will do what they have to do to maintain market share. And Wal-Mart is making a much bigger play for HDTV sales this year, with an expanded line-up of top brand products.

If the consumers come out waving wads of cash, all will be well for the manufacturers and retailers. But I don’t think that is going to happen. Yes, the Dow Jones Industrial Average is at an all-time high, but that doesn’t really matter to the bulk of the American buying public. Bigger factors are higher interest rates and the difficulty of getting credit. Without home mortgage refinancing, many families are not going to have ready cash for big ticket items like HDTVs. And with the whispers of recession being spoken out loud, more and more workers are feeling uneasy about the future of their jobs.

So while people will tell you that they really want a flat screen TV this year, they may not be quite so anxious to shell out the bucks to get one. This leads to my big “if”; if consumers don’t start spending on HDTVs in the next five weeks, someone is going to blink. Maybe it will be a manufacturer looking at thousands of sets stuck in warehouses, with factories still churning out thousands more. Maybe it will be a retailer who needs cash flow at any price, or who is concerned that they won’t hit their target market share. But someone will blink. And all the brave talk about not slashing profit margins the way they did last year will go right out the door. One will drop prices, and the others will have to follow.

I think this will happen, and the most likely point to try to “buy” sales with lower prices is Black Friday, the day after Thanksgiving. So if you want a good bargain, wait until then to buy. If the market is as bad as I think it may be, the lower prices will not be a one day or one weekend event, but will carry through the end of the year.

If you’re a gambler and you want to roll the dice for an even better deal and are willing to wait, then the last week of the year may be your best bet. I expect that even with lower prices, the stores will have more inventory than they will want to carry over into 2008, and some may do crazy things to get rid of some of that during the last week of the year. This is far enough in advance of the build-up to the Super Bowl that you may see another round of desperation discounts for that last week of December.

You may know when to buy, but do you know what to buy? The answers are in Professor Poor’s Guide to Buying HDTV, now available in paperback from Amazon or other fine booksellers.