High-def, low price–declining sales

Sales of high-definition TVs appear strong overall, but those figures are leveled off by falling sales in some subcategories, due to a decline in consumer spending. And surprisingly, the declines are being seen in lower-priced TVs.

According to research firm DisplaySearch, TV unit sales rose 5% to 7.5 million in North America during the first quarter, compared to 7.2 million in 2007. But a breakdown of those numbers shows sales of TVs under 40 inches fell 2% to 4.7 million units shipped.

Paul Gagnon, director of North America TV research for the DisplaySearch, said the decline is likely a result of entry-level buyers feeling the pinch of higher gas and food prices. “Suppliers are facing the biggest challenge right now in selling smaller TVs in the lower price ranges,” said Gagnon. “And those are people who are putting off buying a high-definition TV because of the economy.”

That’s one reason suppliers are slashing prices in that area. “Sony just introduced a 32-inch model at a price point of $699,” said Gagnon. “And that same model was selling for $799 or $899 at this time last year.”

On the flip side, more affluent consumers not affected by the economic slowdown are continuing to buy larger-screen TVs. Sales of TVs larger than 40 inches rose 19% during the first quarter to 2.8 million units shipped. Overall, the average price of a TV fell slightly during the first quarter to $906 from $927 in the like quarter last year.

DisplaySearch data also showed sales of old cathode ray TVs are quickly falling out of the picture, accounting for just 1 million of the 7.5 million TVs shipped during the first quarter.

Samsung was the market leader in the quarter, with about 20% of the worldwide market, followed by Sony with 13%. LG, Sharp and Panasonic rounded out the list of the top five suppliers.