Plummeting prices since the end of last year have motivated many consumers to buy 40-inch-class LCD-TVs instead of 30-inch-class. With new-generation fabs coming on line and the consequent increase in the supply of 40-inch-class panels during 2H’06, the shift toward LCD-TVs with larger screen sizes will almost certainly continue.

Ken Werner
Senior Analyst and Editor
of HDTV Retailer

That’s a nice generalization. Let’s look at some numbers to back it up. Digital Times reports that Samsung Electronics’ 32-inch TV models fell from 52% of the company’s unit sales of large-screen LCD-TVs in December to 46% in February, while 40-inch-range sets jumped from 38% to 47%. February was the first month in Samsung Electronics’ history that 40-inch-class LCD-TVs outsold 30-inch-class, according to our friends at DisplayBank.

At LG Electronics 32- and 37-inch LCD-TV sales shares both grew 2% - from 50% to 52% and 7% to 9%, respectively - while the 42-inch share increased 20% to 28%.

The panel prices that are driving this adjustment in consumer behavior are dramatic. In the first half of this month, according to WitsView, the ASP of a 42-inch LCD panel is $1015, down 25% from the second half of February. The equivalent ASP for 40-inch panels is $890 (down 5%); for 37-inch panels, $750 (down 15%); for 32-inch panels, $525 (down 15%).

So what do these numbers suggest?

• The 37-inch size range is not popular compared to 32-, 40- and 42-inch
• The lower pricing of 40-inch is likely leading to higher sales vs. 42-inch LCD-TVs
• The significant price drop in 42-inch panel pricing means this battleground dynamic will change

None of this means that LCDs are knocking PDPs off the map. A report recently released by DisplaySearch states that from 4Q’04 to 4Q’05, PDP-TV shipment share grew from 1.8% to 3.9% of the market (a 109% increase), while LCD-TV shipment share grew from 5.9% to 14.7% of the market (a 137% increase). (The LCD numbers are substantially larger because they include TV sets of all sizes, while the PDP numbers obviously refer only to large-size panels since all commercial PDP panels are large.)

So the supply side is working hard to keep this boulder rolling, but have consumers hit the wall of large-screen exhaustion after the Super Bowl and the winter Olympics? Don’t bet on it. Baseball spring training is just around the corner, and much of the world is gearing up for the World Cup - and the World Cup is said to attract more fans than any other sporting event in the world. Period.

LCD-TVs - and PDP-TVs, too - are heading for another robust quarter.