Falling Prices Threaten Flat-Panel Health

Colin Tang

Came across this interesting article analysing the rampant price and margin compression in the flat-panel TV industry.

In the article it mentions a variety of factors, including reaction to heavy price promotion from warehouse clubs, manufacturers going off MAP programs for key periods and a dramatic oversupply in the second half of 2006. It then lists 10 ways that could lead to market recovery (read profitability).

While my heart `bleeds’ for the industry’s predicament, I can’t help but wonder the consumer benefit from this intense competition especially regarding to price structure and HDTV features. It is certainly one of the fastest and most lucrative market out there right now, and the big boys know this.  In my opinion, everyone is going to change TVs in the next few years and the area to watch out for is the 700-1500 price margin. To put it simply the best TV in that margin will have the public’s vote of confidence.

On the other side of the coin, consumers will have to put up with some instability and confusion about fluctuating `standards’ and different feature sets.  Quality control may suffer when products are rushed to the market and bugs have not been fixed.

I trust the market sorting itself out, and in any great battle, there is always someone left standing. For the moment, I want to enjoy the choice all this brings.