(MoneyWatch) Musings on the death of plasma television sets have been around for at least a half dozen years, based on the recession and improved LCD set technology. Those predictions have so far proven premature. But new data from analyst firm IHS suggests that plasma TVs may finally be on their way out in the U.S., largely because they have lost their key price advantage.
According to IHS, the Super Bowl countdown has become a time for people in the U.S. to stock up on large flat screen televisions. This year, LCD sets (the category includes LEDs) had an even bigger win than the Ravens: 15 percent year-over-year growth for January sales. The industry sold about 2 million sets during the month, "one of the most important months of the year for the U.S. television market," and the reason was declining prices. According to the firm's press release:
"The cost of LCD TVs sized 50-inches and larger has been plunging since the second half of 2012 as television brands introduced new models," said Jusy Hong, senior analyst, television, for IHS. "This rise in competition helped propel strong growth for large-sized LCD TV sales during the Super Bowl sales season in January. Shipments of LCD TVs sized 60-inches and larger showed particularly strong gains, with their penetration of the market tripling in January compared to the same month in 2012."
That's great for consumers, and vendors likely basked in the volume, if not the profit margins on the units. However, plasma set sales "plunged." An email exchange, and a check with the South Korea-based analysts, led to a number. Plasma TV sales dropped by a full third year over year in January. About 200,000 sets -- a tenth of LCD sales.
Plasma sets have enjoyed a number of advantages. They generally cost less, offered better contrast, and didn't have problems displaying fast action. But LCD manufacturers have improved image quality and, more importantly, driven down price with increased volume. In fact, the 60-inch LCD models of second-tier brands were actually cheaper than similarly sized plasma from top-tier manufacturers. Presumably, those driven by a budget saw the brighter screens and cheaper prices of some LCD brands and picked those instead of plasmas. The question now is at what point will the remaining plasma vendors decide that putting everything into LCD will make more sense, and more money.