Definitely a good time to buy hi-def

7 Jan

January 7, 2008

By Geoff Meeker

Have you been putting off buying that high definition (HD) TV set? Been waiting for the prices on widescreen plasma or LCD to come down?

If so, then your time has arrived.

Amid the usual flurry of Boxing Day flyers, I noticed some amazingly cheap prices on high-end, HD flat screen televisions. There were some remarkable buys, such as a Samsung 40” HD widescreen for just $999 at Future Shop (and a good buy even at the regular price of $1699).

So what’s up – or down? Have the prices of big screen TVs finally dropped within reach of the working class? I called Dave Budden, sales manager at West End Electronics, who confirmed that there has indeed been a significant decrease in price.

“We would estimate that there has been a 30 per cent reduction in price over the last six months or so,” Budden said. “That’s very substantial.”

The most popular flat screen television in the store – a 50” Panasonic plasma – was selling for about $2,900 a few months ago, he said. “Now it’s selling in the $1,900 range, which is more than a 30 per cent drop. I bought a 42” TV myself in February of last year. The retail price then was $3,000. The same TV goes for $1,499 now, which is a drop of roughly half in less than a year.”

If you missed out on the Boxing Day sales at Future Shop and elsewhere, don’t panic – the price isn’t going anywhere but south. The question is, will sticker prices continue to drop at this rate?

“I don’t have that crystal ball,” Budden said. “But the nature of our business is that prices usually don’t go up. I think it’s a safe assumption to say that there will be a further price erosion. How much it will be I don’t know.”

The drop in price is driven by growing consumer demand, Budden explained, in that costs go down as items are produced in greater volumes. “And I think a lot of it has to do with competition between manufacturers. There’s what I like to call the A brands – the Sonys, Panasonics and Toshibas of the world – and they have a lot of pressure from the C brands, the no-name brands. They are all cheap Chinese names that are not the same picture quality and probably don’t have the same reliability, but they are lower priced. I think that drives the price of the better stuff down.”

Compounding matters, Budden added, is the fact that Japanese manufacturers are obsessed with maintaining current sales volume at pretty much any cost. “They will actually sell their products below cost to avoid losing market share,” he said.

Prices have dropped correspondingly on the smaller screen HD televisions as well. You can now buy a name-brand 26” HD widescreen in the $700 range – even cheaper if you watch the sales or buy a no-name brand.

The reduction in price on LCD and plasma has also diminished the demand for rear projection HD televisions (which have excellent image quality but take up more space than flat screen models). Some of the major manufacturers have already stopped producing rear projection, Budden said, and you will likely see substantial markdowns on any remaining inventory in the months ahead.

Then there’s the old tube TVs, which continue to plummet in price to the point that you can buy a 20” TV for less than $100 and a 32” for $275 (if you can find one at all). I don’t recommend buying a tube TV as your main home unit, but it can make a great second or third set, for the bedroom or cottage. In fact, I just bought a 20” model with built-in DVD player for $149. I needed something basic for the exercise room, on which to play my Pilates-kickboxing workout DVD.

The bottom line? Flat screen TVs have become quite affordable and, for the average consumer, it’s probably a good time to buy.

Geoff Meeker is a communications consultant with a soft spot for technology. He also writes a blog about the local media scene, which is hosted at http://www.thetelegram.com.

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