Flat-panel TV prices set to dive, analysts say

Wed Oct 15, 2008 4:15 PM EDT

A combination of weak consumer spending and a peak in manufacturing capacity will push prices for flat-panel TVs down to unprecedented lows this holiday season, according to analysts.

David Barnes, analyst at NPD Group's DisplaySearch unit, said prices look set to decrease rapidly starting on "Black Friday," the day after Thanksgiving, and lasting through next year.

It's even possible that 32-inch LCD TV sets, which now usually cost $600 to $700, will go as low as $350 in stores. That's a significant level: It's close to the long-run average price for a TV in the U.S., Barnes said Tuesday.

He believes these smaller sets will be the big sellers this year, as consumers, and possibly also credit-card companies that had fueled big-ticket spending, tighten their belts.

"We're about at the point where the 32-inch set will be the commodity," Barnes said Tuesday.

Larger 40- or 42-inch sets are already dipping below the $1,000 level, another important psychological barrier.

Barnes' colleague Paul Gagnon said the industry is coming out of a period of rather tight supplies of LCD panels, but more factories are now coming on line.

One factor that could boost sales is the impending shutdown of the analog TV broadcasting network in February, which means that older TVs that receive TV over the air will need a converter box. That will drive people to the stores to figure out their options, Gagnon pointed out. New TVs can receive the digital signals that are replacing analog.

But it's still not certain that abundant and cheap flat panels will lure consumers who have seen their home values and 401(k) funds decline.

"There's a lot of conflicting pressure on the consumer," Gagnon said. "It will be interesting to see which factor wins out this holiday season."

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