Consumer-electronics manufacturers are gearing up for the holidays by cutting prices on high-def TVs. Here's a handy buyers' guide
'Tis the season to go high-definition, if prices for big-screen TVs are any guide. As the weather gets colder and the holidays grow near, competition among television manufacturers is heating up. A price war between makers of plasma and liquid-crystal display (LCD) TVs has pushed prices to their lowest point in years.
Wide-screen, 50-inch plasma televisions from makers such as Toshiba (TOSBY) and Hewlett-Packard (HPQ) can be purchased online for less than $2,000 this holiday season. In the days before Thanksgiving, Sony's (SNE) entry-level, 50-inch LCD was listed as low as $1,348, and Samsung's 50-inch Digital Light Processor (DLP) set was advertised for $1,135 over the Net. As recently as two years ago, 42-inch sets were selling for prices in the neighborhood of $4,000 (see BusinessWeek.com, 4/4/05, "Your Next TV,").
On average, HD television prices have declined 50% over the past two years, according to ConsumerReports.org. Since August, the average price of screens in the 40-to-44-inch range has dropped roughly 9%, to about $1,900, according to Pacific Media Associates (see BusinessWeek.com, 10/04/06, "Big-TV Battle: LCD vs Plasma"). "The bigger they are, the faster they fall," says Paul Semenza, an analyst at market research firm iSuppli in San Jose, Calif.
New Technology Paves the Way
And big is the name of the TV-making game these days, especially when it comes to the factories that produce the machines. "What has happened over the past year is the factories have grown big enough to make these big panels efficiently," Semenza says. "Up until a year ago, you couldn't make 40-inch panels [and larger] very efficiently."
Another reason for the price decline stems from the technological advances that help LCD manufacturers produce large screens at comparable cost to plasma. DLP technology adds even more competition, paving the way for firms such as Vizio to enter the market traditionally populated by Sony and Toshiba.
Another contributor to price declines is overall quality of screens. Most high-end televisions are capable of producing a beautiful picture with 1080i resolution, the format used by high-definition broadcast networks, says Semenza. As a result, television manufacturers need to differentiate on price. Retailers such as Wal-Mart Stores (WMT) are also cutting prices to get customers into their stores.
Handy Shopping Tips
While price declines may be bad for businesses squeaking by on small margins, they're a blessing for buyers intent on bringing home an HDTV. Despite the prices, savvy shoppers still want the best big screen for the buck. However, there are some things to keep in mind, aside from price, when browsing for a new set.
High-definition TV is best enjoyed big. Smaller-sized plasmas can have difficulty displaying full HD-quality resolution, says Semenza. LCDs tend to display higher resolution on smaller screens than competitors.
When larger than 50 inches, plasma, LCD, and DLP all produce beautiful pictures, and better models avoid problems typically associated with their type. Plasmas, for example, are known for having good black levels, meaning that you can see details in dark colors when the lights are off. However, images can sometimes leave impressions if the screen displays the same picture for too long. The phenomenon, known as "plasma burn-in," has become increasingly rare as plasmas become better and broadcast networks become sensitive to the damage they can do by keeping their logo in the same place on the screen, for example. Many plasma TVs are now equipped with a "white screen" or "snow screen" option that erases such ghost pictures. Plasmas are also flat and can be hung on the wall, a design feature many consumers prefer.
LCD screens are also flat-panel but are generally brighter than plasmas, making them better for brighter rooms. However, dark images are typically considered inferior when viewed on an LCD, vs. plasma screens. LCDs also tend to use less power than typical plasmas.
Keep Future Needs in Mind
DLPs, the televisions that use tiny mirrors to reflect light and produce images, are typically the cheapest of the three types. That's partially because they use rear projectors that keep the television from being made in the flat style now in vogue. It is also, in part, because they have a bulb that may need to be replaced over time. However, DLPs have become considerably slimmer over the years, and the bulbs are made to be long-lasting. The viewing angle also tends to be more limited than for LCD and plasma screens, so you see a considerably better picture when watching from in front, rather than off to the side.
Another tip from the experts: Consider capabilities you may need in the future. One such feature is 1080p resolution. It is higher quality than 1080i, but television does not yet broadcast in the format. Certain video-game systems, such as the Sony PlayStation 3, and high-definition videos are capable of displaying the higher-resolution format. "Progressive (1080p) is kind of the ultimate future-proof way to go, but it is unclear how soon there will be a preponderance of content in that format," says Semenza.
Television buyers will also want an HDMI connection, preferably more than one, for connecting to other electronics. As more devices become capable of displaying HD images, such connections will be necessary to ensure that quality is not lost in the transfer from device to television screen.
Enough Room for a View?
Last, and perhaps most important, is the size of the room where the set will reside. A big-screen HD television is best when you can sit at the proper viewing angle and distance from the set. It doesn't do any good to have a 50-inch-plus screen if you plan on sitting three feet away. The recommended distance for 50 inches is at least 6.3 feet. The distance increases to more than 8 feet for a 65-inch television.
Given the continued price decline, a lot more consumers are likely to be watching TV on a big screen after this holiday season ends, whatever the size of their living room.