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LCD HDTV Prices to Hold Steady?

May 9, 2006 | Author: Ibex Marketing

The display market research firm WitsView has reported that the average wholesale cost of a 42″ LCD panel for HDTV use has fallen to $860, down from $890 last month. The company is predicting that prices for LCD HDTV panels will start to stabilize this summer, after fairly steady declines.

Predicting the future prices in any market is a challenge, but the display market is nearly impossible. Even if you can accurately predict the effects of increased production capacity as new manufacturing facilities come on line, you also have to take into account the competition from other technologies. The 42″ model segment is the battleground for LCD, plasma, and rear-projection. It’s possible that plasma or rear-projection makers can cut their prices further, in response to the LCD panel price drops. And it’s possible that one manufacturer may be willing to sell panels at a loss in order to gain market share. And if this happens, others will probably match those prices.

There are lots of plants turning out lots of panels that need to be built into HDTVs and sold. If sales slow this summer for any reason, the manufacturers will be under great pressure to cut prices in order to move product. So while it’s possible that prices will stabilize this summer, I wouldn’t say it’s for certain.