Anyone familiar with LCD HDTVs expects their prices to decrease, and for TVs from established companies to cost more than models from upstarts like Insignia and Vizio — but no one expects the top-shelf brands to come down in price faster than the value brands. Yet that is exactly what's happening. Higher-end brands no longer carry the premium they once did: The delta between the value brands and the big-name brands can be as little as $100 these days.
According to a study by research company iSuppli, a basic 40- or 42-inch LCD TV (1080p, 60Hz refresh, CCFL backlighting) by Sony sold for $1487 in October of last year, but this May it was going for $1098--a drop of 35 percent. By contrast, the price of a similar Vizio dropped by only 27 percent, from $1037 to $819.
The narrowing trend extends across the industry. Among the major manufacturers (LG Electronics, Philips, Samsung, Sanyo, Sony, Toshiba, and Vizio), the price difference between the most-expensive and least-expensive sets dropped from 66 percent to 48 percent. (An eighth company, Insignia, was also included in the survey, but not as far back as October.)
Why? iSuppli surveys show that HDTV shoppers rank picture quality as the most important criterion in their purchase decision, but price is also very important.
"The rising popularity and growing consumer comfort with value brands like Vizio is prompting premium competitors to offer cheaper LCD-TV models," explains iSuppli principal analyst Riddhi Patel. On top of that, Vizio's value-priced TVs, such as the VO42LF, display images that rival the premium companies' products.
Might the current recession be forcing prices down? Patel isn't sure how much of the change can be attributed to the economy, but she told us via e-mail that "the discounts you see continuing after February...have not been this aggressive in...past years."
In their more-expensive HDTVs, big-name companies are adding features. Some of the additions, like the LED backlighting in the Samsung Series 9 (LA46A950), are intended to improve that all-important image quality. Others, such as the YouTube support built into the Panasonic TH-50PZ850U, give you more material to watch on your TV.
On the feature-free low end, however, LG, Panasonic, Samsung, and Sony have to compete with Insignia and Vizio, and that means dropping their prices.