Revenge of the cheap LCD TVs

A while back, I wrote a column about cheap LCD TVs, so I suppose this qualifies as the sequel--part deux, follow-up, or whatever you want to call it. In any case, if you've been keeping tabs on flat-panel TVs, you've probably noticed that prices are falling pretty precipitously, with 32-inch LCD models hitting $1,000 and 37-inch models approaching $2,000. Plasmas, particularly 42-inch versions, are also heading toward more reasonable territory, and if you're a Costco devotee, you may have noticed the store selling a 50-inch plasma for the remarkable price of $2,800.

The big--and not so surprising news--is that LCD category leader Sharp and other big brands, including Samsung and Sony, are getting undercut by such upstarts as Westinghouse, Syntax Olevia, Kreisen, and Maxent, the label on that $1,000 32-inch LCD and "budget" 50-inch plasma. What's more interesting, however, is that the performance gap between the no-namers and the brand-namers is shrinking at the same time, at least in select cases.

We can't vouch for Maxent flat-panels--we expect to review the 32-incher soon, but in the meantime you can check our message boards--but we've been testing the Westinghouse LVM-37W1, a 37-inch 1080p LCD that just hit stores and can be found for around $2,000 online. That's a good $1,500 less than the 37-inch Sharp Aquos being sold at Costco, which offers less in the way of resolution. The Sharp still displays deeper blacks, which means better color and punchier images in dimly lit scenes, but the Westinghouse, pardon the pun, has a sharper picture and more-accurate out-of-the-box color. It also has a solid connectivity package that includes two DVI ports, although it lacks the sound-carrying HDMI inputs. What the Westinghouse is also missing is a loaded feature set: an ATSC tuner, a CableCard, and the like. But I have a hunch that many people just want a flat-panel TV that'll connect to their high-def cable or satellite box.

We have the two sets sitting side by side in our lab, and the Sharp is the sleeker of the two--but not by much. Sharp has moved away from the silver frames of its older models and onto a darker, carbon-color frame that I prefer. But the truth is, since they're all slim, most flat-panel TVs look pretty slick, which is a big part of the reason we've been getting so many e-mails from readers imploring us to review these budget sets--and pronto. They want to know if the picture is up to snuff or not.

I find it amusing that the Costcos and Wal-Marts are becoming the Crazy Eddies of the 21st century. Behemoths that they are, they're able to drive their prices down by buying thousands of these no-name models and marking them up modestly (probably in the 10 to 15 percent range). Best Buy and Circuit City have similar deals for various no-name brands. And Dell, the biggest seller of LCD computer monitors, is now on its own price-cutting mission with its flat-panel TV offerings.

Does that spell trouble for big-name electronics companies?

Not this year, and not with demand for flat-panels so high. It also doesn't hurt that plenty of people, when making a purchase of this magnitude, are still willing to pay a premium to go with a brand name such as Sharp, Samsung, Panasonic, or Sony. In our reviews, we can tell you whether a set's picture is decent or mediocre, how strong its features and connectivity are, and whether it's currently a solid value. But what we can't tell you is how it will perform over several years, which is certainly a factor when you buy an expensive TV. That's part of the reason why, when it comes to LCD TVs, especially in 32-inch or larger sizes, I tend to steer people toward Sharp and LG, both of which have been making LCDs for a while. (I've had an Apple flat-panel display, which was made by LG, for more than seven years, and it still works well.)

As off-brand and OEM LCD factories continue to perfect the production process for larger panels, and companies such as Westinghouse do a better job slapping the parts together, the Sharps of the world will face pricing pressures and inevitably smaller margins on their sets. If it hopes to have consumers continue paying a premium for its TVs--and the same goes for Sony--not only will the performance lead have to be there, but designs will have to get sleeker and more unique. At last year's CES, Sharp was showing TVs made with wood frames and other more exotic materials, but those models were destined for only overseas markets. That may soon change, particularly as even name brands such as Philips get more aggressive with pricing on LCDs.

Any way you look at it, competition is good news for consumers. Unless, of course, you hate the idea of buying something this year that will cost 25 percent less next year.