A recent survey conducted by iSuppli has found that companies such as Vizio and others who rely on offering low-quality TVs may face problems as the price gap between them and more established competitors continues to fall.
In April, the lowest-priced 40-inch premium brand TV cost $900, with the TV line trying to compete with $615 value models, according to iSuppli. Fast forward a couple of months, and a 42-inch premium TV now costs $955 while value brands offer an equivalent TV for $798, iSuppli research discovered.
The $285 difference is now just $157, and even though shoppers are looking for bargains during the sluggish economy, they may just be willing to spend the extra money and get a product from a well known company that has better picture quality.
A Samsung TV available $1,416 in 2008 now costs $920; LV’s TV offering for $1,650 dropped to $1,099; and Sony’s $1,455 TV is now available for $1,098.
"The rising popularity and growing consumer comfort with value brands like Vizio is prompting premium competitors to offer cheaper LCD-TV models in the 40-inch and larger sizes," said iSuppli analyst Riddhi Patel in the iSuppli report.
Indeed, a consumer’s final shopping decision will rest on which TV looks better, as the price gap continues to drop. "So even if premium and value brands reach price parity, the dominant factor will still be which television actually looks better to the naked eye."
I’ve seen Vizio and Olevia TVs on store shelves for lower prices, but I’ll be interested to see if consumers continue to pick these value brands as the price gap begins to favor Samsung and others. The premium brands are now dropping prices on lower-priced models to better compete with Vizio and others, but their high-end TVs — which have additional perks and features — are still available for higher price tags.