The price differential between Liquid Crystal Display-Televisions (LCD-TVs) sold by premium brands and value brands are narrowing as premium brands look to capture a wider consumer base by offering both price competitive models as well as feature-rich models, according to iSuppli Corp.’s U.S. TV Price and Speciļ¬cations Tracker.
This narrowing of price differences between the premium and value brands in the 40-inch and larger segment is contributing to increased sales of premium brands LCD-TVs. According to iSuppli’s April US TV Consumer Preference Analysis report, consumer purchases of premium brand, 40-inch and larger sized LCD-TVs are continuing to increase, widening the market share gap between the premium and value brands in this size segment. Premium brands also are targeting the premium buyers with their high-end, feature-rich LCD-TV line-ups, found mainly in the 40-inch and larger sizes.
But do these moves even matter?
Quality is King
Also according to the latest US TV Consumer Preference Analysis, consumers’ No.-1 consideration when buying a new LCD-TV isn’t price, but picture quality. Price is secondary. So even if premium brands 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 tool for any company. Who would choose a nameless Taiwanese or Chinese brand over a Sony Bravia or Samsung?
But as is the case with U.S.-based Vizio, building a brand from the ground up can be just as effective. According to iSuppli’s Television Market Tracker Service, Vizio once again surged to the top spot in the North American 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.
Delivering a quality LCD-TV at a lower price works for now, but more importantly for Vizio it is becoming a brand that consumers are getting to know. And when price parity inches closer, this may help Vizio to remain among the Top-5 OEMs in North America.
Prices Up
Overall, April saw average LCD-TV prices in the 40-inch and larger screen sizes increase by 3 percent on a monthly basis, despite price drops on the older models, as more better-featured models in the larger sizes continued to be introduced by premium brands during the month. The lowest price in the 40/42-inch size LCD-TV in April dropped by 7 percent month-on-month, reaching $600.
Premium brands also are offering entry-level models in this size segment, which are priced as competitively as the value brands. The lowest price found during the month on a 40-inch premium-branded LCD-TV was $700.
Samsung saw the introduction of more Light Emitting Diode (LED) backlit models, including the 8000 series, in April. 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. This dual-pronged strategy from the major premium brands is helping them to maintain market dominance as well as to uphold profit margins.
Beyond LED backlights, LCD-TVs capable of viewing Internet videos and web content are also showing up as a new feature set for televisions, again mainly seen on the premium brands, as these look to attract consumer interest by incorporating a new living room experience.
iSuppli expects average LCD-TV selling prices to decline slightly in the coming month, 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 LCD-TVs Pricing with iSuppli's Latest Report, High End Model Introductions Lift Average LCD-TV Prices
For More Information on Television Consumer Preferences Read iSuppli's Latest Report, Consumer TV Buying Behavior Remains Price Driven.
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