LCD HD Prices Fell Twice as Fast in 2009

LCD HD average selling prices in calendar year 2009 fell about twice as quickly as they did the previous year. This price fall came despite the introduction of new technologies such as LED backlighting, which cost a bit more than non-LED units.

For the most part, the price points' rapid descent last year leading up to the 2009 holiday sales season was due largely from a massive over-supply that hit its critical mass in late 2008 and early 2009. The overall "blended Average Selling Price" for LCD TV panels fell 24 percent in 2009—and 21 percent for plasma units—according to the most recent data compiled by industry analyst DisplaySearch.

Because of the subsequent price drops, the demand for flat-panel TVs (most of them HD) "was much better than expected" at the beginning of 2009 due to price erosion. During the first half of last year, DisplaySearch notes, it was easier for brands to cut prices since LCD price points had fallen so much in late 2008. But the situation reversed itself in the second half of last year, peaking in September (prior to the holiday sales season).

For the rest of 2010, average LCD prices are expected to fall more slowly—"especially with booming demand in China keeping the supply situation tight in the first half of the year." In addition, DisplaySearch concludes, the increased mix of premium priced LED-backlit LCD units and 3DTV sets will help offset any natural price erosion.