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Ken S 01-03-2014 10:41 AM

High-End TV Prices Tumble
 
From The Wall Street Journal - Friday January 03, 2014

Little Ultra High-Def Content Is Available but Chinese Makers Crank Production

By: Kana Inagaki And Jonathan Cheng

Prices of ultra high-definition TVs are plummeting, driven by Chinese manufacturers and by surging demand in that country.

The first UHDTVs were a hot topic at last year's Consumer Electronics Show. TV makers, hoping to replicate the widespread acceptance of HDTVs, showed off early models there with price tags of between $9,000 and $25,000.

At those lofty prices, the sets were dismissed as novelties for the ultrarich. Now, a much broader lineup of UHDTVs will arrive at the Las Vegas show next week, and their lower prices should attract buyers despite the lack of new content.

Companies including Sony Corp. and LG Electronics Inc. now sell UHDTV sets in the U.S. for as low as $3,000, down from $4,500 a few months ago. Even in Japan, the price of Toshiba Corp.'s 55-inch model has halved to as low as ¥300,000, or $2,850. Meanwhile, some smaller models from lesser-known Chinese brands sport tags below $1,000.

Though price erosion is commonplace in consumer electronics, the rate of change for such new products is unusual, according to industry officials. "It probably happened a little quicker than we expected," says Timothy Alessi, director of new product development at LG Electronics. "I thought it was a little bit premature to take those kind of price drops."

UHDTV technology, also known as 4K (for 4,000-pixel horizontal resolution), promises to display four times the number of picture elements as current high-definition TVs. The big-name manufacturers mainly use the technology in diagonal sizes larger than 55 inches.

Chinese consumers—who have shown a penchant to jump on technology trends early—have driven the buying so far. NPD DisplaySearch puts 2013 shipments of UHDTVs at 1.9 million units, with 1.7 million of them sold in China.

The research firm predicts UHDTV shipments in 2014 will surge to 12.7 million units—about 6% of the market for liquid-crystal display TVs—and China will account for 78% of their total. It predicts about 800,000 of the new sets will be shipped in North America.

Even at that small fraction of the television market, the volume is surprising because of the lack of content. Most widely used sources of video—such as cable and satellite networks and Blu-ray discs—support only high-definition resolution, in part because 4K images generate a lot more data.

"I have a Sony 4K TV and I've never seen a 4K picture on it," says Anthony Wood, chief executive of Roku Inc., which makes a line of boxes for streaming video content to televisions.

Jim Denney, vice president of product management at set-top box maker TiVo Inc., says the availability of ultra-high resolution content would likely come sometime after 2015.

Meanwhile, Japanese TV makers are trying to justify their price tags by using extra chips that adapt regular high-definition content so an improvement is noticeable on 4K sets.

LG's Mr. Alessi says he fears that the lack of such features on the less-expensive Chinese-made sets will give UHDTV a bad name.

"Side-by-side comparison tends to show a big difference," says Paul Gagnon, director of North American TV research at NPD DisplaySearch. "The question is whether or not it is worth two times the price. That's something that's going to take time to figure out."

Chinese companies such as Skyworth Digital Holdings Ltd. 0751.HK -2.31% and Sichuan Changhong Electric Co. are determined to crack the global market, aided recently by low-cost display panels from Taiwan.

Xu Ming, general manager of Changhong Multimedia Business Co., a unit of Sichuan Changhong, concedes that the quality of entry-level Chinese 4K TVs lags that of companies like Sony and Samsung Electronics Co.

"But I don't see much difference when you compare high-end Chinese TVs with them," he said. "We are very confident [competing] in the global market."

The average price of UHDTVs sold in China is expected to fall to $973 in 2014, compared with $1,288 in 2013, according to NPD DisplaySearch. Outside of China, the firm expects the average to slide to $1,637 from $4,313.

Analysts say TV makers selling premium-priced sets are making money. The question is whether they can keep doing so.

"The global brands are afraid of low-cost brands that have gained market share and that give consumers the impression that you don't have to pay a lot of ultra high-definition premium," said Jusy Hong, principal analyst at research firm IHS iSuppli.

Some big-name set makers continue to reach for higher prices. A Samsung 85-inch 4K model is listed on Amazon at nearly $40,000, while the company recently announced plans to deliver a 110-inch TV in early 2014 that is expected to cost on the order of $150,000.

Overall, however, "Prices will continue to decline," Toshiba President Hisao Tanaka said recently. "We'll make sure not to stretch ourselves to sell a lot."

—Liu Jing and Don Clark contributed to this article.

http://online.wsj.com/news/articles/...92630876600834

rbinck 01-03-2014 05:31 PM

Re: High-End TV Prices Tumble
 
Sounds like we are a few years away from general acceptance. Thanks.


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