The above chart from research firm IHS iSuppli tells us that premium TV brands have been consistently lowering prices of high-end LCD TV units because white label makers have been on a roll, putting out inexpensive products with features previously offered by branded vendors only. According to IHS iSuppli, the average price of a typical high-end LCD TV in the United States dropped from $1,317.89 in July 2010 to $1,002.58 in July of this year. That’s a healthy 23.9 percent drop in just a year. IHS displays researcher Lisa Hatamiya:
Long the chief attraction for high-end brands like Sony and Samsung, features such as 1080p high-definition resolution, 120Hz refresh rates and LED backlighting technology now are cropping up in value brands entering the market, especially in the 40- to 42-inch space. But unlike their pricey counterparts, the new upstarts boast dramatically lower pricing. For example, value brands like Apex and Element offer 40-inch 1080p/120Hz LED sets for $550 at Target and Wal-Mart stores across the United States. In comparison, premium brands with the same features are priced at about $1,100—double the price offered by the discount brands.
It has been speculated that a possible networked television set from Apple won’t gain traction due to vendors going after each other’s throat with low-priced commodity products that yield very slim margins. This would force Apple out of the entry- to mid-level range and the company would price itself even out of the premium segment, conventional wisdom has it. Then again, wasn’t the mobile landscape riddled with same barriers to entry prior to the iPhone? With the average selling price of a premium LCD TV falling below the magic $1,000 barrier, however, the timing for an Apple television couldn’t be better. A stylish 50-inch television set priced at $999 with the shiny Apple logo could easily hit the ground running and here’s why.
Your guess is as good as ours, of course, so feel free to chime in down in the comments. For starters, Apple has mastered the art of supply and high volume manufacturing to perfection. They enjoy all the benefits that come with it, such as economies of scale. Backed by a strong marketing push from Apple’s marketing machinery and with the added benefits of tight iCloud integration, a television from Apple simply feels right. Apple is also thought to be building super data centers all around the world, apparently to serve full HD television programming in local markets, thereby reducing latency and offloading bandwidth pressure off the North Carolina facility. A television product would turn Apple into a 21st century broadcaster and widen the addressable market for app developers to include screen sizes ranging from 3.5-inch smartphones and 9.7-inch tablets to 13-inch, 15-inch and 17-inch notebooks all the way up to 27-inch desktops and 50-inch big screen TV for your living room. And if OS X and iOS unite, as few say, the underpinnings for such a product are all but in place. After all, Apple is a $100+ billion company now and it can only grow that much unless it enters new markets. Big screen TVs are not on par with cell phones, computers and soon tablets, but it’s the only consumer electronics market segment (save dedicated game consoles) big enough for Apple and it appears to be in the same state of flux that the music industry was a decade ago. Make sense?
FTC: We use income earning auto affiliate links. More.