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Interesting article

http://www.wired.com/gadgets/displays/news/2007/05/lcd_prices

The Party's Over as LCD Television Prices Hit Bottom

Thinking of buying an LCD television set? Wait no longer: The price plunge is over. After years of accelerating decline, prices for consumer LCD TVs -- especially those smaller than 32 inches -- have hit bottom, industry insiders say.

That's because the price of wholesale LCD flat panels -- the display component of your TV set -- has recently reached its lowest point and rebounded, according to numbers released by market data research firm iSuppli. When a TV's most expensive single component starts getting more expensive, you can kiss retail price cuts goodbye.

"Prices are going up like crazy. We expected it to be a tight supply, but it seems like there is something going on," says Sweta Dash, director of LCD research for iSuppli, about the LCD market. "In just one month the price increase has been really high."

Though April saw the first notable price increase to hit flat panels since their appearance in TV sets and computer displays, the bounce then was barely perceptible compared to massive price drops over the previous six months. In May, however, prices have risen sharply. The prices that TV manufacturers pay for the display screens in their TVs typically account for 50 to 60 percent of a TV's final consumer price. According to iSuppli, the manufacturer prices for 32-inch and smaller LCD panels rose in May by as much as $5 to $10 over April's prices (then about $300 for a 32-inch display).

"We anticipate that LCD prices as a whole are stabilizing," says Todd Richardson, a senior vice president at Philips North America. "Smaller screens will stabilize or incrementally go up, due to global supply."

At one point, the price of a 32-inch panel dipped below its own manufacturing cost, according to iSuppli's report, leading some manufacturers to leave the market altogether, and prompting others to trim production.

The competitive state of affairs came after LCD makers rushed to maximize production in the early years of the decade, as ultra-thin monitors and televisions overwhelmed older technology unexpectedly quickly in the public imagination. Now manufacturers are culling production capacity and letting stockpiles fall fallow. In fact, screens sized 37 inches and less are now sold out for the year worldwide, sources say.

However, the tight LCD panel market is unlikely to translate into direct price increases at your local electronics store, according to iSuppli's Dash.

"It has never been done in the TV market, to increase consumer prices," says Dash. Instead, suppliers are likely to absorb the price increases for now, deferring any increases until next year's models. In the meantime, don't look for any more big discounts.

After years of tumbling prices, that might be just the way manufacturers intend to keep it.

Additional reporting by Paul Boutin.