updated 03:15 pm EST, Wed December 27, 2006
LCD TV Margin Crisis
The success of LCD televisions in recent months may ultimately hurt the very manufacturers who expect to benefit most from the booming sales, according to a report by iSuppli. While the number of units sold is expected to jump by 57 percent in 2007, the actual revenues from those units is only likely to increase by 20 percent -- resulting in far smaller margins that leave little room for error. Manufacturers are said to be countering the price drops by shifting their focus to 40-inch and larger LCDs; however, the average price of even these sets is predicted to fall from just over $1,700 this holiday season to $1,200 by the same period next year.
The news comes as a number of low-cost TV makers such as Mustek and Vizio have revealed that they hope to shatter price barriers on larger TVs, which normally hold on to larger profits courtesy of a perceived higher value over smaller models.