LCD TV boom unlikely: analysts

Liquid crystal display (LCD) televisions will not be showing up in most families' living rooms by 2006 as the pace of the price drop has lagged behind consumers' expectation, market watchers said.

The high price tag has diverted potential LCD TV buyers to more affordable plasma display panel (PDP) TVs, or rear-projection liquid-crystal-on-silicon (LCoS) TVs, they added.

"Price is a determining factor for consumers when considering what kind of TV to buy," said Simon Yang (楊森帆), an consumer electronics analyst at the private Topology Research Institute (拓墣產業研究所).

Currently, PDP sets are ideal for living rooms as consumers can get a 50-inch TV -- big enough for most families in the US -- at a prices similar to that of a smaller 30-inch LCD TV.

"LCD TVs are still considered as a second set in studies or bedrooms as the retail prices are still far from the acceptable level, despite the ongoing price decline," Yang said.

If the price of LCD TV drops to around double that of a traditional cathode ray tube (CRT) television, then it would be an acceptable price for most consumers, he said.

Topology predicts the price of LCD TVs will drop to that reasonable level in 2006 after flat panel manufacturers start to supply large-sized panels at much lower prices.

Japanese major TV brands -- including Sharp Corp, Sony Corp and Matsushita Electric Industrial Co, which makes the Panasonic brand -- only lowered LCD TV prices by around 10 to 20 percent last year, despite the price competition from computer makers such as Dell Inc, Hewlett-Packard Co and Gateway Inc, Yang said.

Local brands, such as BenQ Corp (明基電通), Taiwan's No.1 handset maker and a leading consumer electronics maker, slashed LCD TV prices at a faster pace .

BenQ lowered the retail prices by around 40 percent last year and expects to slash prices by around 25 percent this year, said Peter Chen (陳其宏), a vice president of the digital media division of BenQ.

Currently, a 30-inch LCD TV made by Japan's Sony Corp will cost consumers NT$24,000 a set. To get a better deal, consumers should try local brands such as Sampo (聲寶) or Teco (東元), for about NT$99,000 each. But, the price is still nearly triple that of a similar-sized CRT TV.

Sampo's and Teco's offer, however, appeared to be less attractive, compared to the 50-inch rear-projection LCoS TV made by Taiwan Kolin Co (歌林), which retails at NT$119,000.

A further decline in the price of LCD TVs will not meet consumers' expectations as the decline will mostly rely on the panel trend, analysts said.

"The price trend of large-sized panels is key to LCD TV's retail price because panel cost makes up the biggest portion, about 50 percent, of the LCD TV cost," said Wu Pei-wei (吳佩偉), a fund manager at ABN AMRO Asset Management Taiwan.

Middle-sized 20-inch to 30-inch LCD TVs will have the biggest price drop, about 25 percent this year from 2003, but prices for TVs with screens bigger than 30 inches will only drop slowly by 15 to 20 percent, according to the Topology's research.

The local research house predicted the global demand for LCD TVs will more than double to 10 million units from 4 million units last year.

Eric Twu (涂紀華), an industry analyst with SinoPac Securities Corp (建華證券), said the crux will lie in whether flat-panel makers can smoothly operate the advanced sixth-generation or seventh-generation plants.