WTF: Bad Economy Actually Slowing HDTV Price Drops

One would think that a shitty economy = more cheap stuff for us consumers, right? You know, the whole "go out and shop!" brand of problem-solving we've become accustomed to? Not this time.

Analysts at DisplaySearch have told Eric Taub at the NYTimes that they are projecting a dismal year for TV sales in 2009: not only are sales of all TVs expected to decline in all of North America by 4%, LCD TV sales are expected to grow only 2%. That's compared to a 22% gain in 2008 and 77% in 2007. Always thought to be recession proof, TVs are getting hit.

But why the slowdown on continuously plunging prices? Expecting reduced sales, panel factories are cutting back on production. And if you've been paying attention, you know that production efficiencies at high volume (via things like 150-inch panels of mother glass) are what drives prices down.

DisplaySearch is seeing panel factories in Taiwan and Korea are currently scaled back to 80% capacity; pair that with cancelled plans for new, more efficient manufacturing plants, and you've got the recipe for a halt to the downward pricing trend on HDTVs:

Mr. Semenza [of DisplaySearch] expects that prices for LCD sets 32 inches and smaller will remain fairly stable. Retail prices on TVs 42 inches and larger will not decline as fast as they have in years past.

Bummer. [NYTimes, Photo: mgminthu/Flickr]