Why now's a bad time to buy a TV

I recently got a note from a reader asking me what the deal with TV prices was. "Hey, David," Mike M. wrote, "I've noticed that prices for TVs have been in a kind of a holding pattern over the last 6-12 months. I thought we'd see better deals at this point. What's up?"

That's mostly true. Chalk it up to rising oil prices, the falling dollar--whatever--but prices for flat-panel TVs just haven't been declining at the same rate that we saw a couple of years ago. Yes, you see some decent discounts on 2007 models, refurbished "manufacturer re-certified" units, and certain sizes of LCDs (a couple of editors here have their eyes on the Samsung LN52A550 52-inch LCD, which sells for a compelling $1,700 online). But, all in all, prices have held fairly steady.

For example, take Vizio's entry-level 32-inch LCD, which came out for $600 a year ago. It still costs $600 today. And then there's the higher-end, highly rated 50-inch plasmas from Panasonic and Pioneer we recently reviewed; they cost basically what they did a year ago--and in some cases, even more. So, what gives? Should you wait to buy a new TV (if you can) or is now as good a time as any?

Here is my take on the overall TV market for the rest of 2008 and early 2009, technology by technology:

Plasma:

While our video guru, Senior Editor David Katzmaier, continues to rate plasma higher than LCD in terms of pure picture quality, plasma technology is in a more precarious position than it was a year ago. Part of the problem is that LCD continues to get better and more screen-size choices are being offered. Secondly, the prices for plasma sets have barely dropped in the last year. Higher-end 50-inch models will run you $2,000-$3,000 (or more), and a 58-inch model like the Panasonic Viera TH-58PZ700U still costs around $3,000. And, while this year we've seen some impressive picture-quality enhancements from leading plasma brands Panasonic and Pioneer, they're mainly in improved contrast (black levels)--a videophile's Holy Grail. But black levels are getting better generally across the board, to the point that they're actually probably "good enough" for casual viewers on most displays. It also doesn't bode well that Pioneer--as good as it's been at making plasma--basically couldn't make it on its own and has had to opt to use Panasonic panels.

Plasmas look better than ever--but LCDs of similar size (and price) are looking good enough for most viewers.

Aside from blacker blacks and better off-access viewing, the big advantage of plasma over LCD has been simple math: until recently, you could get more plasma screen for your money. However, that's increasingly not the case, as LCD is making a strong play in that 50-inch sweet spot with well-priced 52-inch models, like the aforementioned Samsung, that offer 1080p resolution. Even though the benefit of having 1080p vs. 720p is fairly minimal, the added resolution is a marketing point to which plasma makers are being forced to respond. As a result, you're paying a premium for 1080p plasmas versus identically sized 720p models, even if you can't tell the difference with a lot of content (though some 1080p plasmas are still beating competing LCDs on price). Finally, it doesn't help that plasma still hasn't completely shaken off its reputation for burn-in--regardless whether that reputation is warranted. For whatever reason, retail salespeople still recommend LCD more than 3 to 1 over plasma.

Outlook: Murky. Plasma really only makes sense at larger sizes and the majority of people are looking at 50-inch models. Those 50-inch models need to be available more consistently in the $1,100-$1,500 range, and prices need to come down a good $500-$800 in larger sizes fairly soon or plasma is in trouble. I'm personally interested in a 58-inch plasma, but I wouldn't consider buying one until the price for a good one hits $2,500 or less. Watch for plasma to come down slightly--we're talking a few hundred dollars--in the coming months, in response to falling prices for LCD TVs.

Rear-projection:

A while back I wrote a column where I stated that rear-projection was on its deathbed. That's still true; and things are only looking even bleaker. Sony has already exited the market, no longer producing its once vaunted SXRD sets. Mitsubishi is trying to hang in there with DLP and Laser TV, but it's facing a real uphill battle (the price for Laser TV needs to be cut in half pretty quickly for it to have any chance). We really liked Samsung's new LED-based DLP line, and if I were taking bets, I'd say it ends up being the only rear-projection survivor.

Outlook: Not good. But if you can live with a deeper TV and mediocre off-axis viewing (the picture deteriorates if you're sitting too far off to the side), rear-projection still offers the most screen for your buck. Our Editors' Choice 61-inch Samsung HL61A750 sells for less than $2,000 online and the 67-inch HL67A750 doesn't cost much more. We expect prices to come down a few hundred bucks around the holidays, as Samsung looks to clear out the remaining rear-projection competitors and makes a bid to own this niche category. Two-grand for a 67-inch model is tempting.

TalkBack

Do you think LCD prices will fall? Is plasma in trouble?

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OLED:

Talk to me in two to three years. Maybe then we'll see a model larger than 32 inches that costs less than $5,000.

Front-projection:

Prices have held pretty steady in the home-theater projector market, although you can get significantly more projector at the high-end than you could a year ago. Case in point: the Samsung SP-A800B ($9,999 list price), which happens to be the highest-rated home video product on CNET right now. You can still get a decent projector for $2,500-$3,000, but you could a year ago, too.

Outlook: Flat. Front-projection continues to represent an excellent value in very large screen TVs (after you factor in some extra dough for a screen), but prices just don't seem to be dropping anytime soon. We'd like to see a model like the Panasonic's PT-AE2000U 1080p projector come in less than $2,000, but it seems to be stuck at $2,700--and standing pat.

LCD:

When it comes to LCD, the word we've been hearing a lot lately is "glut." A lot of LCD factories came online this year and manufacturers have apparently overestimated worldwide demand. A representative from a budget-brand TV manufacturer (who didn't want to be named) said that demand for TV purchases in the U.S., and particularly China, has been much weaker than the forecast; he expects LCD prices to fall significantly in the coming months.

What does that mean exactly? Well, you should see non-refurbished 32-inch LCD TVs for less than $500 this holiday season and 40-inch to 42-inch models, such as the Westinghouse VK-40F580D and Toshiba 42RV530U, down below $1,000. Also intriguing: you'll see a new size in LCD, the 55-inch model, which certain companies will sell for as little as $2,000, putting increased pressure on plasma manufacturers to lower prices for 58-inch models.

Outlook: Gradual chopping. Look for prices to start coming down significantly at the end of September and early October as we head into the holiday season. We may see 20 percent price cuts by Thanksgiving. It may not happen across the board, but certain-size sets will get healthy price chops.

Bottom line: In short, wait if you can. This year's holiday deals will seem better than last year's. I can't make any promises, but when you've got oversupply and weak demand, you usually get lower prices. It's kind of a law.

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