Is plasma starting to fade out?

Plasma televisions, while still the finest made in the eyes of purists, are rapidly losing ground to LCD-based models, say analysts and industry observers. That's because Liquid Crystal Display TVs have plunged in price and innovated their way to near-parity with plasma in terms of image quality.

"If you're a videophile, you're still absolutely more into plasma than LCD, and plasma will still be the predominant choice for video enthusiasts and sports and movie buffs for the next couple of years," said Suave Kajko, publisher and editor of Canada HiFi magazine. But for most consumers, "LCDs are blowing plasma out of the water," said Megan Pollock of the Consumer Electronics Association.

Even newer technology is emerging that could best both LCD and plasma, known as OLED (Organic Light-Emitting Diode).

Sony's pioneering XEL-1 11-inch OLED model, which lists for $2,500, "produced the best picture I've ever seen," Kajko said. But OLED manufacturing capacity is currently limited, so for at least the next few years, "the battle is between LCD and plasma," Pollock said.

Plasma's early lead
Those two technologies have been rivals since roughly 1998, when together they started encroaching on the market held largely by analog TVs built around the cathode-ray tube.

That late-19th century technology formed the heart of TVs from their infancy in the late 1920s. The sole alternative was the analog rear-display TV, whose hulking faux-wood cabinets once projected big, blurry images in bars and rec rooms. It has virtually disappeared.

Digital TVs using plasma or LCDs initially made up a tiny fraction of the market. Even in 2005, only 2 million of the 31.1 million TV sets sold in the United States used LCDs, said Riddhi Patel, an analyst with iSuppli. Another 4 million used plasma, the rest being analog.

Since then, plasma and LCD models have jointly vanquished analog models. At the same time, competition began developing between the two victors. Competition? More like a religious war, to judge by the vociferous user comments and discussions on sites like Cnet.com and Amazon.com.

Early on, plasma sets had the buzz as providing an unparalleled image. They were the prestige sets to buy, even at $8,000 to $10,000. But over the last five years, LCD TV growth has hugely outstripped that of plasma sets in the brisk American market.

A change in the market
In 2006, of the 33.2 million sets sold in the U.S., 10.3 million were LCD and 3 million were plasma. By 2008, of 31.1 million sets sold, 24 million were LCD vs. 3.5 million plasma. This year will show the first decline in plasma TV sales: an estimated 3.3 million sets, versus nearly 30 million LCD sets.

Some makers are getting out of the plasma business entirely. Pioneer — never a big-volume seller in the U.S. but hailed by reviewers for making the finest big-screen TV yet, the plasma-based Elite Kuro — is bailing on plasma at the end of 2009, a company spokesperson said. (Some Elite Kuros remain available, with the 60-inch model selling for about $5,800.)

Vizio, which sells the most LCD-based TVs in the U.S., "made a concerted effort to sell plasma last year with a 32-inch model," said co-founder Ken Lowe. But it couldn't compete with 32-inch LCD models, especially in terms of power consumption, Lowe said, and Vizio abandoned the plasma market in early 2009. Fujitsu has reportedly left the plasma market too.

Why are LCD sets increasingly outselling plasma?

The biggest reason may be price. It's dropping rapidly for LCD TVs, while prices for plasma sets remain relatively static.

Industry-wide, a 50–inch full high-definition LCD set now costs roughly 10 percent more than a plasma set, said Samsung U.S. senior vice president John Revie, whose company makes both kinds of sets. That's because larger LCD sets cost more to manufacture than their plasma counterparts with big screens.

Crossing price barriers
Still, plasma remains far cheaper than LCD in some instances. Amazon.com's best-selling 42-inch plasma TV, from Panasonic, sells for $900, while a feature-comparable 40-inch Samsung LCD model sells for more than $1,600, said Amazon.com vice president Paul Ryder.

LCD TV prices have fallen so sharply because there's a large supply of makers and materials, said Tim Alessi, a director at LG Electronics USA, which makes both plasma and LCD TVs.

Shane Buettner, editor of Home Theater, said the LCDs' price cuts overcame differences in image quality.

"LCDs crossed enough price barriers quickly enough that consumers got over the fact they didn't have the same image quality as plasma, and that shift has been pretty dramatic over the past three to five years," he said.

But must viewers sacrifice image quality?

Today's TVs are extremely sophisticated in their inputs, adjustability and features, and few viewers will bother to tweak them for maximum performance. But even out of the box, LCDs now near or equal plasmas.

That's because of much recent innovation in LCD technology — more than in plasma.

Both types of TV are adding features such as access to online streaming movies from Amazon or Netflix and online widgets from Yahoo that provide weather and headlines.

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