The price differential between Liquid Crystal Display-Televisions (LCD-TVs) sold by premium brands and value brands is narrowing as marquee nameplates vie to capture a wider consumer base by offering less expensive models, according to iSuppli Corp.

The lowest price in April for a 40-inch premium-branded LCD-TV was $900. The lowest price for a 40-inch LCD-TV offered by a value brand was $615. Comparable 42-inch premium and value brand sets were priced at $955 and $798 respectively.

This narrow price gap makes the premium brands very competitive with value alternatives.

“The rising popularity and growing consumer comfort with value brands like Vizio is prompting premium competitors to offer cheaper LCD-TV models in the 40-inch and larger sizes,” said Riddhi Patel, principal analyst, television, for iSuppli.

But while price is an important consideration for consumers when selecting an LCD-TV to buy, it’s not the most important factor.

“Consumers’ No.-1 consideration when buying a new LCD-TV isn’t price, but picture quality,” Patel said. “Price is secondary. So even if premium and value brands reach price parity, the dominant factor will still be which television actually looks better to the naked eye, rather than the price on the tag. Obviously, in a perfect world, that would even the playing field. But when it comes to consumer electronics, it is anything but even. Brand recognition is an important asset for any company. Who would choose a nameless Taiwanese or Chinese brand over a Sony Bravia or a Samsung?”

However, there are exceptions to this rule. For example, U.S.-based Vizio has achieved remarkable success as a premium alternative brand built from the ground up.

According to iSuppli’s Television Market Tracker Service, Vizio surged to the top spot in the U.S. and Canadian LCD- TV market in the first quarter.

Vizio’s lowest Average Selling Price (ASP) for a 42-inch Cold-Cathode Fluorescent Lamp (CCFL) backlit, 60Hz refresh rate, full High-Definition (HD) LCD-TV was $850. In comparison, Samsung and Sony 40-inch LCD-TVs with the same configurations carried ASPs of $1,000 and $1,090, respectively.

The attached figure presents global average price trends for 40/42-inch LCD TVs, with full high definition resolution, 60Hz refresh rates Cold-Cathode Fluorescent Lamp (CCFL) backlighting.
 
A premium on premium features
While the Premium brands now are offering less-expensive LCD-TVs, they continue to produce higher-end models with up-to-date features.

Average LCD-TV prices in April in the 40-inch and larger screen sizes increased by 3 percent on a monthly basis, despite drops for the older models, as premium brands continued to introduce more full-featured sets in the larger sizes during the month.

Samsung in April introduced more Light Emitting Diode (LED) backlit models, including the 8000 series. Prices on these high-end models in the 40- to 49-inch segment range from $2,500 to $4,000, varying by brand and size.

“The premium brands’ dual-pronged strategy of offering high- and low-end models can help them to maintain market share amid the rise of Vizio,” Patel said.

Beyond LED backlights, LCD-TVs capable of viewing Internet videos and web content also are showing up as a new feature for televisions, mainly on the premium brands.

iSuppli expects average LCD-TV selling prices to decline slightly in the coming months, as brands and retailers roll out with promotions for the upcoming “Dads and Grads” season. However, average list prices likely will remain flat as more new models are added to the product mix. In general, current inventory levels at the retailers are at a healthy five to six weeks.

Find out more about pricing of LCD-TVs with Patel’s latest report, High End Model Introductions Lift Average LCD-TV Prices. For more information on this report, please visit: http://www.isuppli.com/ProductDetail.aspx?ID=28492&L1ID=172&L2ID=1005

For more on consumer preferences and what buyers actually want when they select a new LCD-TV, see Patel’s report, entitled: Brands Delivering Value for Money Gain Consumer Support. For more information on this report, please visit: http://www.isuppli.com/ProductDetail.aspx?ID=28484

And finally, for questions on LCD-TV market shares by OEM and trends in the LCD-TV market, Patel’s upcoming Market Tracker will have the answers. Find out more by visiting: http://www.isuppli.com/Products/L1_Television.aspx
 
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