TV prices could plummet for holidays

Reader Heather Fisher writes: Are the prices of flat panel TV's going to go down anytime soon? When can we expect them to go down if they are?

I'm getting mixed messages on the TV pricing issue.

First, it's pretty clear that prices will continue to slip as the holidays approach: You can thank the global economic crisis and slow demand for that. But the harsh realities of the flat-panel business would seem to indicate that there's not much further for flat panel prices to fall. Why? Because in virtually all cases, LCD screens are already being sold to TV and computer companies at prices below cost, according to the latest research from DisplaySearch, which closely tracks this industry.

In some cases the discrepancy is extreme: Panel makers are selling bare 32-inch LCD TV panels for an estimated $223 to manufacturers, but those panels cost between $248 and $256 to build. In other words: For now, the panel makers are losing up to $33 on every panel they sell.

Prices for finished TVs vary widely of course, but name-brand 32-inch LCD TVs can be found at retail for under $600, with $599 being a pretty common price point. Add in labor and the additional materials that go into a finished TV, distribution costs, and markup from the retailer, and there really isn't a lot of fat left in television prices. (Very large TVs are the exception, so if you're looking for bargains, shop smaller.)

Now here's the curious flipside. According to a blog post on the very same topic at the New York Times, another researcher, also at DisplaySearch, says that prices are likely going to plummet in the next few weeks. According the post, this researchers says prices on 32-inch TVs could hit between $399 and $499.

That would be an enormous drop, and it almost sounds too good (for shoppers) to be true. Again, the reasons are all about trying to salvage sales in the fourth quarter... but the story also alludes to the fact that the biggest discounts will be in the bare-bones, off-brand, stripped-down TVs. You'll get good enough picture quality, but don't expect, say, 120Hz operation, multiple HDMI inputs, and so on.

The most likely outcome is that off-brand models will fall quite a bit, but name brand sets will have more modest price cuts. (I'm deeply skeptical that we'll see 32-inch LCDs hit $399 aside from the occasional Black Friday sale, but that's a gut reaction.) Is it worth it to wait a few weeks to save 50 bucks on the price of a TV? How willing you are to brave holiday crowds and fight over what could become hotly desired goodies may have to dictate your next move.