Prices Keep Falling

Major manufacturers have been quoted recently, saying that the plummeting prices for flat panel HDTVs in 2006 were more than they had expected, but that price reductions in 2007 should be smaller. And I dismissed this as whistling in the dark. The new year is less than a week old, and V Inc — makers of the Vizio brand of flat panel HDTVs — has fired the first salvo. They are offering a 1080p LCD HDTV for under $1,900. That’s pretty impressive, if you think it’s a 42″ model. But it’s not; it’s a 47″ model, which has about a 12% larger diagonal size!

This announcement makes it pretty clear that 1080p is going to be the resolution of choice going forward, and the price premimum for the extra resolution over a 720p model is going to evaporate, at least for LCDs and rear projection HDTVs. Plasma models are going to have a difficult time producing a true 1080p panel at an affordable price (many “720p” plasmas don’t have enough horizontal pixels to completely display a 720p image as it is).

Many LCD manufacturers are pulling back on their plant expansion plans, which means that they expect to have an oversupply with their existing capacity. If that’s the case, then expect downward pressures on prices to continue, and we may hear some companies singing the same tune about unexpectedly low prices around this time in 2008.