Pacific Media: Large HDTV Market Defies Price-Based Logic

40- to 49-inch flat panel HDTVs outsell rear projection 4 to 1

June 6, 2006

Pacific Media Associates, the global market information experts on large-screen displays, reports that unit sales for flat panel HDTVs and business displays — LCDs and plasmas — in North America have outstripped sales of rear projection models. In spite of higher selling prices, flat panels have dominated sales of models larger than 40 inches, long thought to be the heart of the rear projection market. In short, consumers want thin TVs and will pay a premium to get them. Over the past 16 months, the unit market share of flat panel displays larger than 40 inches has grown from 32% to 62%. “Flat panel displays continue to carry average street prices well above those of rear projection models,” according to Rosemary Abowd, Vice President with Pacific Media, “but the gap has closed significantly in the past six months, shrinking from $2,000 in January 2005 to just $500 in April 2006. The price advantage does not appear to help rear projection sales, as individual consumers still appear to be very willing to spend up to $1,000 extra for a flat panel television in some size segments of the market.” Competition is fiercest in the 40- to 49-inch HDTV segment, and flat panel models have been about $1,200 more expensive than rear projection models since the 2005 holiday buying season. In spite of the higher price, flat panel models have outsold rear projection models 4 to 1 over the last six months. Rear projection models continue to outsell flat panels among the larger, high-resolution models such as 1080p HDTVs larger than 50-inches, as this is where the price advantage is the greatest for now. Pacific Media is in a unique position to provide this analysis across HDTV technologies. The monthly average street prices are based on actual retail transactions by individual model collected from a sample of more than 50 major retailers and dealers throughout North America. This true sell-through volume-weighted data, available for the U.S. only from Pacific Media and NPD, requires the hard-to-get cooperation of retailers and dealers. The result is more accurate and more valuable than the easy-to-get unweighted Web-based price check data used by other research or publishing firms. The data for the comparison presented here was pulled from a subset of the total database, looking at comparable data from retailers with monthly data for both flat panel and rear-projection sales for the past five quarters. As with any data based on a sample, it is subject to sampling error, but the breadth and long-term consistency of the data collected by Pacific Media provides dependable results.

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