Want to buy a big-screen TV? Don't wait too long

Nov. 27, 2012 at 4:10 PM ET

Yuriko Nakao / Reuters /
A man looks at Panasonic televisions displayed at an electronics store Oct. 31 in Tokyo. Many Cyber Monday deals on televisions have been extended through this week.

Japan’s legacy television brands continue to struggle against competitors like Samsung and LG as well as low-cost Chinese manufacturers, and this means a fuzzy picture for American shoppers trying to decide if and when to buy a TV.

Retailers are struggling to move inventory as shoppers, still wary about the economy, gravitate towards cheap Chinese options despite their lack of bells and whistles.

“I think the market’s flooded now,” said RJ Hottovy, director of consumer equity research at Morningstar.

Sharp and Panasonic reported losses for their most recent quarters. Sharp was the most dire in its outlook, saying it faced “circumstances in which material doubt about its assumed going concern is found” in its most recent earnings report. Sony’s quarterly operating profit came in below the expectations of analysts surveyed by Thomson Reuters, according to CNBC

In the short run, this could be good news for buyers who want to buy a TV this holiday season, especially those in the market for a 50-inch-plus behemoth.

“It’s a great time to buy big screens,” said Gary Merson, editor of “It’s the fastest-growing segment, but it didn’t grow as fast as they expected.” The result is lower prices across the board. The kind of deals that usually surface in January are here now, as manufacturers race the clock to get rid of their excess inventory before their new models come out early next year.

"We had great Black Friday deals. We had great Cyber Monday deals," he said. "A number of the vendors have extended their pricing from Cyber Monday through the week... If you see it at a substantial discount this week, grab it." While there might be better deals down the pike for TVs that are currently 10 percent off, Merson said the 30 percent, 40 percent and even higher discounts won't last. 

Merson highlighted a Samsung 60-inch LED LCD with an MSRP of $2,570 now selling for $1,297.99 through, nearly half off, and a Panasonic 55-inch, LED LCD smart TV with an MSRP of $1,700 now on sale for $899.99.

There’s a flip side to this fire sale, though. Analysts say name-brand manufacturers are scaling back production for 2013 and focusing more on higher-end models, which could translate to higher prices in the form of fewer markdowns, rebates or add-on freebies, especially if demand for more sophisticated models grows.

“Thin costs money. Smart costs some money if it’s built into the set, and better quality panels with higher contrast ratios cost more money,” Merson said. “If you want better performance coupled with a svelte design and smart [functionality], they all have a built in inherent cost.”

“Those brands are more likely to fight on features than price,” said Stephen Baker, vice president of industry analysis at NPD Group.

The question is whether American viewers will pay for those features. The industry is taking a big gamble that they will.

Following a less-than-robust demand for 3-D TVs, manufacturers are pinning their hopes on what they hope will be the next big thing, a super-high resolution that goes by the terms “4k” or “ultra HD.”

“4k is to HD what HD was to standard definition,” said James McQuivey, principal analyst at Forrester Research.

But it’s not mainstream yet for a few reasons, he said. A big-screen set retails for five figures, and there isn’t yet any content or transmission standards for the format (and tech bloggers argue about the extent the human eye can even appreciate that many pixels).

Merson said interest among early adopters was good, but it’s still a very small slice of the buying public willing to drop $10,000 or more on a television. What's more, the cutthroat competition in the market will drive even the price of this “next big thing” down in just a few years.  

This means shoppers who are willing to be patient will probably be able to get more TV with more features for less money, especially as Chinese companies become increasingly sophisticated and start competing more directly with brands like Samsung.

TV viewers who want cutting-edge technology, especially when it comes to resolution, as soon as it hits the market will pay for the privilege. “I see much more innovation... just to differentiate between the manufacturers,” said Paul O’Donovan, principal analyst at Gartner Inc.

“The real premium price goes to the ultra HD,” he said. “This is exactly where they plan to get their money.”

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