For TV retailers, the world is getting flat

Martin Wolk Chief economics correspondent • Profile • E-mail

I don’t care if it’s high-def, low-def or no-def, but please, Santa, make my new television a flat-panel.

That could be the Christmas wish for millions of American consumers as televisions have become a hot holiday sales item, driven by rapidly falling prices for flat-panel models.

Despite a morass of acronyms, jargon and competing technologies, industry executives say consumers are overcoming any confusion and boiling down their desire to a single, simple demand: Make it flat.

“I think that there has really been an inflection point in the market, and that inflection point has been new price points on flat-panel television sets that have really excited customers," said Kevin Winneroski, television merchandise leader for Best Buy. "Many consumers may still have the lingering impression that to buy a flat panel requires a $10,000 investment, and it’s just not that way."

Prices for flat-panel televisions have come down 30 to 40 percent since last year, sparking a surge in demand for the advanced televisions, industry executives and analysts say.

For example, a 42-inch high-definition plasma screen from industry leader Panasonic is selling for about $3,000, compared with $4,500 last year. A 32-inch flat-screen LCD television that sold for $3,000 last year now goes for about $2,000.

About 6 million flat-panel TVs worth $7 billion wholesale are expected to be shipped to U.S. dealers this year, up from 2.7 million units valued at $4 billion last year. Next year factories are expected to ship 10 million flat screens worth $10 billion, according to the Consumer Electronics Association.

Winneroski of Best Buy said flat-panel televisions account for about 25 percent of the retailer’s unit sales, up from 10 percent a year ago.

Flat-panel screens come in two basic flavors -– plasma and LCD -– and each technology has its own set of pros and cons. But so far there is little overlap between the two varieties, with LCD screens available in smaller sizes up to 42 inches measured diagonally, while plasma screens begin at 37 inches and go up in size from there.

“Even a year ago it was very very confusing if a consumer wanted a new television set,” said Winneroski, ticking off options including high definition, “enhanced” definition, LCD, plasma, rear-projection and plain, old-fashioned cathode-ray tube.

“Those options are still there, but it’s much clearer from a price point standpoint,” he said.

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