Fire Sale Prices for TV Sets Have Consumers Rejoicing, But TV Makers Aren’t Happy

Dec 27, 2011  •  Post A Comment

Prices for television sets have dropped so much that they largely don’t deliver profits to their makers and retailers, although the price declines have consumers rejoicing, reports The New York Times.

The lower prices are a result of a bump in manufacturing capacity that has led to an oversupply of TV sets, the story notes. As a result, consumers can buy a TV for just a fraction of what they fetched a few years ago.

Panasonic, Toshiba and Sony "have been hammered," the piece points out, prompting Sony to overhaul its TV operations. The company said Monday it would end a flat-screen joint venture with Samsung.

Retailers are also suffering, with Best Buy reporting a 29% plunge in net income for the third quarter, blamed on lower TV and electronics prices, the article notes.

"Perhaps even more ominously for the long term, the future of televisions appears to be more about what content they can provide, like Netflix and iTunes, than new hardware features like flat screens or 3-D technology," the article points out.

Consumers are also learning to wait a few months for prices to come down instead of jumping at buying the latest TVs with new features, the piece adds.

TV set sales figures for North America help explain the oversupply: About 44 million sets are currently sold annually, with an average cost of $460, compared with 32 million TV sets in 2004, with an average cost of $400, the piece says. The average size of a TV screen has grown to 44 inches, up from 27 inches in 2004, the story adds.

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