Plasma TV on the rebound?

It appears the TV industry's self-prescribed medicine of pushing smaller flat-panel sets is working.

The second-quarter check-up is in, and the industry is in far better health than a year ago. DisplaySearch's Quarterly Global TV Shipment and Forecast Report was released Thursday, and worldwide TV shipments increased 11 percent from the same period in 2007, but just 3 percent from first quarter of 2008.

(Credit: LG Electronics)

Still, the news is encouraging to an industry that was wringing its hands back in March over running out of places to sell its rapidly maturing, but still-pricey sets.

Around that same time, some of the bigger tier-one manufacturers began pushing smaller screens in an attempt to attract buyers who might be tightening their budgets as gas and food prices rose.

Vizio made a splash with its 32-inch plasma, a size that hasn't been available in that technology in the U.S. for a while. Even the big guys like Panasonic, LG, and Sony and Samsung were going small: 32, 40, 46 inches.

"Sony and Samsung launched what we termed 'fighter models,' because they were designed to reach new pricing lows," said Paul Gagnon, who monitors the TV industry for DisplaySearch. Vizio's smaller plasma was specifically launched "to blunt the impact" of Samsung's and Sony's moves into smaller-and-cheaper sets, he added.

Vizio's 32-inch plasma sells in club stores for about $550, while Samsung and Sony's 32-inch LCDs each retail for $699, the lowest price each has ever offered for that size TV.

The result has been a resurgent plasma TV business. DisplaySearch is reporting that shipments of plasma worldwide increased 52 percent from the same quarter a year ago, or 3.4 million units. That's way behind LCD TV shipments, but it's encouraging for a technology that many of the biggest vendors had basically left for dead.

Plasma shipments are on the rise everywhere, but they are particularly healthy in China, where they rose 285 percent in the last year.

To be sure, LCD TVs are still the new television of choice for most. LCD shipments jumped 47 percent in the last year to reach 23.7 million units (compared to plasma's 3.4 million units) in the second quarter worldwide, DisplaySearch says.

Despite LCD's established presence in many North American living rooms, it appears that the introduction of smaller sizes and lower prices are helping retailers to move plenty of product. Last year, LCD shipments to the region were dropping. But second-quarter shipments increased almost 30 percent from a year ago.

And LCD prices have still been dropping more quickly than plasma. With major shopping opportunities like Labor Day, the beginning of football season, and Black Friday fast approaching, plasma's recovery could be brief.

Sony and Samsung tend to set the pace on price reductions, and Gagnon of DisplaySearch says the other brands will all react in order to maintain their brand position in the market. If Samsung drops its 42-inch LCD $100 in the coming weeks, expect Panasonic to do the same on its 42-inch plasma.

But it doesn't appear there are going to be bold moves on the part of plasma to steal some more share and get ahead. For all the brands, said Gagnon, "it's all about maintaining price differential."

[rmva]

Lots of interesting information in this article -- almost none of it has to do with plasma TVs. Talk about a niche market!

[UITD]

Sounds like a sales pitch, not journalism. Listen, we've all got SO MUCH disposable income these days. I am SURRRRRE that these all-so-necessary things will rebound. Ya.

[RobertWFrei]

The problem may not be lack of disposable income, the problem may be the most of us don't want to sit 30 feet away from the screen so we can see the whole thing. I, for example, will survive quite nicely with my cobbled digital setup until someone finally figures out that we want 1080p 28" & 32" televisions that don't gobble living space, don't require new glasses prescriptions, and don't require a second mortgage to afford them. 60" screens look impressive at the bar when you are sitting 30 or 40 feet away from them, they look altogether imbicilic in a 16" x 13" living room.

[jevenew]

I agree 100% with Robert. In addition, I would like to see a better integration between A/V products. The average consumer is at a complete disadvantage wheh it comes down to getting DVRs, BluRay, DVD players, Audio systems, and having them interface flawlessly.

[Clockwork Computer]

The sad victim of all this has been the incredibly useful 37" size.
Great for movie watching in a normal rooms and affordable.
Bring 'em back any time, guys.

[MrMurder]

I wanna get my hands on a 32" plasma!!!