Falling Q3’10 LCD Panel Prices Directly Impact Retail Pricing During Holiday Season
Sort Date: 11242010
PORT WASHINGTON, N.Y. and SANTA CLARA, CALIF., November 24, 2010—As Black Friday shoppers gear up to find the best bargains, LCD TVs will likely top their holiday wish lists. According to leading market research company The NPD Group, LED-backlit LCD TV prices have fallen 44% from October 2009 to October 2010 to $1,106. Traditional (CCFL) LCD TVs have also seen significant price drops, declining 24% to $435.
"Holiday circulars consistently feature flat-panel TVs as the marquee door buster electronics category on Black Friday. This year, retailers will seek to offset several months of year-over-year flat-panel revenue drops driven by slowing price declines and rising household penetration,” said Ross Rubin, executive director of industry analysis at NPD. "While LED TV pricing is dropping more quickly than that of traditional LCD sets, LED-backlit models still command a significant price premium.”
Figure 1: Average Price for 42” LED and CCFL TVs
Source: The NPD Group/Retail Tracking Service
While prices for LED chips are falling steadily, the pricing dynamic for the LCD panels themselves is somewhat more complex. After the economic downturn, demand returned quicker than expected in 2009, and the supply chain was faced with product shortages during the second half of the year that fed rising prices for LCD TV panels into the first half of 2010. Since it takes about three months to move through the LCD TV supply chain, the rising panel prices led to slower average selling price declines at retail during the first half of 2010.
“Because profit margins have thinned in the LCD TV category, brands and retailers are somewhat at the mercy of the supply chain when trying to push retail prices lower,” noted Paul Gagnon, Director of North America TV Market Research at DisplaySearch. “The result has been a cooling of growth in some markets, such as the US. As often happens in such cycles, the resulting slowdown in demand for key components including LCD TV panels has once again shifted the supply chain back towards oversupply.”
LCD TV panel prices began falling once again in Q2’10 particularly for the two most popular size categories, 32” and 40/42”, which were 10% and 5% lower in Q3’10 than they were in Q3’09. “The falling panel prices in Q2’10 and Q3’10 will have a direct effect on retail pricing during the Q4’10 holiday. If consumers remain sensitive to falling prices, it could help jump start demand in the US,” Gagnon concluded.
Figure 2: LCD TV Panel Price for 32” and 40/42”
Source: DisplaySearch Quarterly Global TV Shipment and Forecast Report
| The NPD Group: Sarah Bogaty Public Relations Manager +1.516.625.2357 sarah.bogaty@npd.com |
DisplaySearch: Stacey Voorhees-Harmon Public Relations Consultant +1.925.336.9592 stacey@savvypublicrelations.net |
About The NPD Group, Inc.
The NPD Group is the leading provider of reliable and comprehensive consumer and retail information for a wide range of industries. Today, more than 1,800 manufacturers, retailers, and service companies rely on NPD to help them drive critical business decisions at the global, national, and local market levels. NPD helps our clients to identify new business opportunities and guide product development, marketing, sales, merchandising, and other functions. Information is available for the following industry sectors: automotive, beauty, commercial technology, consumer technology, entertainment, fashion, food and beverage, foodservice, home, office supplies, software, sports, toys, and wireless. For more information, contact us or visit http://www.npd.com/ and http://www.npdgroupblog.com/. Follow us on Twitter: @npdtech and @npdgroup.
About DisplaySearch
Since 1996, DisplaySearch has been recognized as a leading global market research and consulting firm specializing in the display supply chain, as well as the emerging photovoltaic/solar cell industries. DisplaySearch provides trend information, forecasts and analyses developed by a global team of experienced analysts with extensive industry knowledge and resources. In collaboration with the NPD Group, its parent company, DisplaySearch uniquely offers a true end-to-end view of the display supply chain from materials and components to shipments of electronic devices with displays to sales of major consumer and commercial channels. For more information on DisplaySearch analysts, reports and industry events, visit us at http://www.displaysearch.com/. Read our blog at http://www.displaysearchblog.com/ and follow us on Twitter at @DisplaySearch.
