Consumers are buying flat-panel plasma and LCD televisions in record numbers doubling sales volumes of a year ago. With so many people owning these big-screen TVs, they may all want to host Sunday's showdown between the Chicago Bears and the Indianapolis Colts.
Unit sales of flat-panel televisions more than doubled in 2006 from 2005, industry statistics show, as LCD and plasma televisions became the top electronics gift purchased in the holiday season, according to NPD Group research firm. In the United States alone, 11 million flat-panel televisions were sold, up from 5.3 million in 2005, according to Pacific Media Associates, which tracks sales from all television manufacturers. In November alone, sales doubled from the previous month, the Menlo Park firm said.
And the pace of sales continues unabated as the days tick to the Super Bowl the sporting event industry analysts say produces the most TV purchases.
"The Super Bowl always brings another hiccup in sales after the big holiday spike," said analyst Rosemary Abowd of Pacific Media. "Sports viewing is one of a few areas where you can cost justify to your wife, significant other, whatever buying a high-definition TV because you can get a better view than you can in the arena," she said.
If you want to buy a Super Bowl XLI ticket in the secondary market, you can expect to spend an average of more than $3,000. That doesn't include the cost of a plane ticket to Miami.
But consumers eyeing televisions have the added lure this year of huge price cuts in LCD and plasma high-definition models and a slew of new digital programming and gaming technology options that don't work well on cathode ray tube televisions.
"There's a tremendous matriculation from (cathode ray tube televisions) to flat panel," said Dave Malloy, president of Redwood City-based electronics retailer Anderson's TV. "It's been phenomenal."
Prices are dropping like water off a cliff so much so that a 42-inch or 50-inch plasma or LCD television can be found for half the price advertised a year ago. Across all sizes, prices have dropped an average 35 to 40 percent, several benchmarks show.
For instance, 42-inch LCD TVs are selling for as low as $1,300, while a year ago the same model was $2,400, Malloy said.
Add to it free chips and beer available at a friend's party, and it beats the lines and costs of the stadium in Miami.
Based on advertisements from Best Buy Co., a 50-inch plasma high-definition TV can be found for $2,800, while a 42-inch can be found for $1,300 to $1,600.
If you're willing to buy a big-screen TV without a household brand name, you can pay even less. Models by manufacturers new to the high-def market, such as Vizio, can sell for as low as $999.
Such prices "open the doors for a lot of folks," Malloy said.
Hoover Chen, a vice president at Envision Peripherals Inc., a Fremont-based manufacturer of flat-panel televisions, said the trend "is very good for consumers. They've been offered 30 to 40 percent price drops year over year, sometimes more, so it is a tremendous savings opportunity."
Prices are one-third what they were two years ago, Chen said.
But don't expect it to last forever.
This price erosion "is very bad for LCD makers," Chen said.
Sony Electronics President Stan Glasgow warned in December that continually falling prices are hurting the industry and could threaten innovation because manufacturers will have less money for research and development.
Prices have been dropping because of fierce competition, Chen and others said. The consumer electronics industry decided that flat-panel high-definition TVs were "the next big thing," Chen said.
"Everybody thinks the market is big, and many suppliers are fighting over the market share" by ramping up television production, he said. That has created a surplus supply in the industry, which compels manufacturers to discount even more.
"Manufacturers are taking a loss at some of these prices," Chen said.
They are making televisions bigger and better. Sony Electronics makes a 60-inch rear projection high-definition TV that it is selling right now for $2,600. That's a 5-foot screen and you can go even bigger if you're willing to shell out tens of thousands of dollars. Panasonic sells a 103-inch plasma TV for $51,000, for example.
But both manufacturers and retailers view Super Bowl Sunday as the last big chance to sell off their inventory. So don't expect the big sales promotions available today to last beyond Feb. 4.
Circuit City Stores Inc. and Best Buy Co., for instance, have football tie-ins in their latest advertisements for flat-panel televisions.
"Beat the clock; Four chances to score great sales," Circuit City's promotion for flat-panel televisions reads. For four days in late January, it is offering what it says are "unusually low prices" for selected models.
What's not included, however, is the cost of installation. Retailers post notices about the installation when buyers get to the contract point.
But consumers should factor in that cost. Hanging a rear projection television on your wall and drilling holes for the wires and connecting them to the proper place is not a job for amateurs. Retailers' Web sites indicate that budgeting another $200 or so for installation could be wise.
Analyst Riddhi Patel of iSuppli, which tracks the flat-panel industry, said the major manufacturers Sony, Samsung, LG and Hitachi, among others are each trying to establish themselves as market share leader. Meanwhile, newcomers are entering the high-def manufacturing business, lured by consumer interest, and are adding to the competition. According to IDG, a market research firm, the number of flat-panel TV manufacturers has swelled to 90.
Previously, a couple dozen well-known manufacturers sold televisions. The result has been an oversupply of televisions and flat-panel monitors, which further erodes prices.
Manufacturers believe their only choice to stay solvent is to pump out more TVs.
With prices dropping 40 percent, Chen said a manufacturer has to increase volume by 60 percent to come out even.
But Super Bowl Sunday may be the last time. "After Super Bowl, you enter the slowest season of the year" for television sales, Abowd said. Retailers may no longer be catering to viewers' desires.
Contact Barbara Grady at firstname.lastname@example.org or (510) 208-6427.