The TV was one of the hottest-selling purchases over the holiday season. That would seem like good news for TV manufacturers and retailers, right? Nope. The main reason TV sales were strong is cheap prices—prices so low that it’s hard to make money on them.
A year ago at this time, retailers and electronics manufacturers were grumbling that consumers weren’t buying TVs like they used to. Today, it’s a slightly different story, with retailers and electronics manufacturers grumbling not because consumers aren’t buying enough TVs, but because they aren’t paying enough per set.
Across the board, TV prices have plummeted. The NPD Group reported that, for the first time ever, 42-inch LCD TVs have average prices under $500 and 60-inch flat-panel TVs have been selling for under $1,000. Even 47-inch 3-D TVs have been going for under $1,000.
A New York Times story filled with electronics salespeople whining about the sad, lowly state of TV prices explains that tough competition is one of the reasons why retailers can’t get away with charging more for TVs.
Another reason: Consumers don’t seem to be buying into the hype over the latest TV technology, which doesn’t seem like much of an upgrade over the old technology that they stare at daily in their living rooms.
Yet another reason: By now, consumers should be well aware of how the game is played concerning new technology, with sky-high prices at the beginning that are soon replaced with lower ones mere months later. As Riddhi Patel, of the market research firm IHS iSuppli, told the Times:
“The industry has trained the consumer that any time there is a new technology, if they wait six months the price will come down.”
In order to entice a critical mass of early adopters that it’s worth paying top dollar for new technology—even though everybody knows prices will soon drop—the new item really has to be impressive. So far, among other technologies, the 3-D TV has failed to impress most of the public. Or at least it’s failed to impress them enough to buy while the technology is still pretty new and very expensive. In this economy, and in this marketplace where everybody knows prices will inevitably decrease in the near future, people just won’t buy unless the technology blows them away.
Thus far, Apple TV hasn’t met that criteria, but there’s no shortage of rumors about what Apple has in store next, and the prospect of an Apple “iTV,” which would have built-in Wi-Fi and be able to access Internet content with ease, looks to be the talk of this year’s Consumer Electronics Show in Las Vegas, even though Apple isn’t attending.
Regardless, right now is a superb time to find a deal on a TV—that is, unless your home is already outfitted with one at every turn. The average American household now has 2.8 television sets. There’s no harm in waiting to buy a new one either. There’s a pretty good chance prices will get cheaper.