Get your flat-screen while they’re cheap
by MaxPower
FROM DECEMBER 06: This was in the Wall Street Journal and a couple financial blogs I read over the last few days:
Rapid-fire discounting of flat-panel TVs is feeding a consumer buying frenzy this Christmas season, but sapping the profits of electronics retailers, with Circuit City Stores Inc. among those hit hardest.Despite the heavy demand, stores nationwide, including relative newcomers to the flat-panel market such as Wal-Mart Stores Inc., remain well-stocked with the big-screen TVs, even though prices have dropped an average 40% in the past year.
The price war has been a boon for consumers who, in some cases, were able to snap up the sets over the Thanksgiving weekend at below retailers' cost.
The plummeting price of HDTVs is turning into a bloodbath for retailers. We can speak from firsthand experience on this one, having just joined the HD revolution in the last 10 days. For one thing, price are down enormously since just this summer, like 35% or more in many cases. Not just that, many sets are down since last week, on the order of 10%, no joke. It's taking a major toll on the likes of Best Buy and Circuit City, which reported earnings for its last quarter that sent the stock tumbling after hours. If you want to find one stock, that's emblematic of the whole problem, check out the purest play on the panels themselves, Corning, which now hovers near a 52-week low, after a multi-year rally.
Additionally, there has been some noise around some investigations by various regulatory bodies that in 2004 a bunch of flat-screen (LCD) manufacturers colluded to fix the price of the screens and keep them high. Analysts in the industry are now speculating that the companies do not want to cut back on production so they don't "appear" to be price-fixing now, even though as evidenced above the prices are in a state of wholesale collapse.
The Korean Fair Trade Commission (KFTC), Japanš„ôs Fair Trading Commission, the European Commission, and the U.S. Department of Justice are investigating numerous big manufacturers, Asian-based media reported. These include South Korean companies Samsung and LG.Philips, Japanese company Sharp, and Taiwanese company AU Optronics. Authorities are investigating anti-competitive activities related to liquid-crystal displays (LCDs), which are used in flat-panel TVs, mobile phone and laptop screens, and portable digital media players.
Dear diary......... jackpot.
People contemplating buying big LCD TVs are headed for a bargain bonanza this year because of rapid price cuts on the panels. Market research firm iSuppli now reckons 72.5 million LCD TV panels will ship this year, a rise of 42.7 per cent from last year. The firm said prices of bigger panels "are declining precipitously" with a 32-inch unit dropping by 17 per cent during the first half of this year. Additional panel capacity will fuel the move with 40-inch and 42-inch WXGA units also dropping price. Some manufacturers are selling 32-inch panels at prices below the cost of production