Real TV Set Pricing
There has been much talk, ours included, about TV set prices, especially since the beginning of the year, as large panel prices have been rising steadily since last June and have now exceeded peak yearly TV panel prices by between 26.9% and 56.0% going back to 2016. That said, talk is cheap and consumers face a harder reality when they walk into a store or go on-line to purchase a TV. As we get closer to one of the US’ ‘shopping’ holidays, Prime Day, we ran through our list of TVs to see how pricing has fared since we did our original survey (11/16/20), the last survey (4/10/21) and current prices. As we have noted in the past, we started our survey by detailing all of the 68 4K TVs that were available on the Best Buy (BBY) website, although we noted then that 18 of the 68 (26.5%) were actually not available, despite their listing, and over time we noted that a number of those listed units never returned, although some remain on the site to this day.
Here’s what we found currently…
Of the original 68 models that appeared on the website, of which 58 (85.3%) were available at the time, only 34, or exactly half, are still available on the site. Given that new models appear and older model lots are sold out, this is not surprising considering 215 days have passed, however what is surprising is that of the 34 models that remain from the original group, 16 or 47.1% are not available locally. This means that of the original 68 models listed on the website only 18 (26.5%) would be available to a customer wishing to purchase one of those units.
The site now shows that there are 105 4K TVs available of which 24 (22.9%) are OLED TVs, which is far above the 6 (8.8%) OLED TVs that were available in the initial study.. While 18 (75%) of the 24 OLED sets available currently are under the LG (066570.KS) brand, Sony (SNE) represents the remaining 25%, while initially only LG had OLED sets available on the site. The increase in OLED TV representation can also be attributed to LG Display’s (LPL) increased large panel OLED capacity, particularly the increasing production at their Guangzhou OLED fab, which has allowed the brand to expand its size offerings and offer more OLED TV panels to outside brands. With LGD’s expectations of being able to ship between 7m and 8m, up from ~4.4m last year, we would expect OLED representation to continue to rise this year
TV pricing, looking at the 34 sets that were still available from the original study, has changed both from the original survey and the last time we checked, with 19 (55.9%) of the 34 higher, 10 (29.4%) lower, and 5 (14.7%) the same against original (November ’20) pricing. When making the same comparison against the last time we checked pricing (66 days ago) there were 20 models (59.8%) higher, 8 (23.5%) lower, and 6 (17.6%) the same, indicating that from a practical standpoint consumers would see a slight decrease in aggregate TV prices (the sample) of 1.9%, but an increase of 8.9% since mid-November of last year. But wait, there’s more…
Looking at pricing of the 10 most expensive sets of the 34, 6 (60%) are higher than original pricing, 3 (30%) are lower, and 1 (10%) is the same, however of the three that saw a lower price today than last November, all were OLED TVs, reflecting LG’s push to lower OLED set prices to expand unit volume now that production has been expanded. This follows true with the comparison against pricing done in April, with all of the OLED sets lower in price and the other sets in the top tier the same or higher. In the lowest priced group of 10, 5 of the 10 sets were higher in price against last November and 5 lower, but when comparing against the April data, 9 out of 10 in the low-priced tier were higher than in April. Since there was an obvious push by LG to lower OLED TV prices, if those sets are removed from the data, the aggregate price of the TVs in the survey increased by 16.4% since last November, and by 3.4% since April.
As we approach Prime day, we do expect to see some TV set price discounts, but we note that in many cases they will be coming from a higher point than the last holiday season and even last April. OLED TVs are certainly the exception, and indicative of LG’s higher capacity and lower cash cost, along with the need to generate unit volumes close to this year’s target. LCD brands however, are facing the ongoing problem of higher material and component costs, and while they might be willing to absorb some of those increases given their high utilization rates, they have been and will continue to be forced to pass those increases on to customers. Whether the consumer is able to ‘see’ the increases that have already been instituted or whether they show as less overall holiday discounting would depend on both panel price increases going forward and any effect component shortages would have on LCD fab utilization, but at least at this point in the year, it seems obvious that the TV set space has been feeling a bit of pain.
Here’s what we found currently…
Of the original 68 models that appeared on the website, of which 58 (85.3%) were available at the time, only 34, or exactly half, are still available on the site. Given that new models appear and older model lots are sold out, this is not surprising considering 215 days have passed, however what is surprising is that of the 34 models that remain from the original group, 16 or 47.1% are not available locally. This means that of the original 68 models listed on the website only 18 (26.5%) would be available to a customer wishing to purchase one of those units.
The site now shows that there are 105 4K TVs available of which 24 (22.9%) are OLED TVs, which is far above the 6 (8.8%) OLED TVs that were available in the initial study.. While 18 (75%) of the 24 OLED sets available currently are under the LG (066570.KS) brand, Sony (SNE) represents the remaining 25%, while initially only LG had OLED sets available on the site. The increase in OLED TV representation can also be attributed to LG Display’s (LPL) increased large panel OLED capacity, particularly the increasing production at their Guangzhou OLED fab, which has allowed the brand to expand its size offerings and offer more OLED TV panels to outside brands. With LGD’s expectations of being able to ship between 7m and 8m, up from ~4.4m last year, we would expect OLED representation to continue to rise this year
TV pricing, looking at the 34 sets that were still available from the original study, has changed both from the original survey and the last time we checked, with 19 (55.9%) of the 34 higher, 10 (29.4%) lower, and 5 (14.7%) the same against original (November ’20) pricing. When making the same comparison against the last time we checked pricing (66 days ago) there were 20 models (59.8%) higher, 8 (23.5%) lower, and 6 (17.6%) the same, indicating that from a practical standpoint consumers would see a slight decrease in aggregate TV prices (the sample) of 1.9%, but an increase of 8.9% since mid-November of last year. But wait, there’s more…
Looking at pricing of the 10 most expensive sets of the 34, 6 (60%) are higher than original pricing, 3 (30%) are lower, and 1 (10%) is the same, however of the three that saw a lower price today than last November, all were OLED TVs, reflecting LG’s push to lower OLED set prices to expand unit volume now that production has been expanded. This follows true with the comparison against pricing done in April, with all of the OLED sets lower in price and the other sets in the top tier the same or higher. In the lowest priced group of 10, 5 of the 10 sets were higher in price against last November and 5 lower, but when comparing against the April data, 9 out of 10 in the low-priced tier were higher than in April. Since there was an obvious push by LG to lower OLED TV prices, if those sets are removed from the data, the aggregate price of the TVs in the survey increased by 16.4% since last November, and by 3.4% since April.
As we approach Prime day, we do expect to see some TV set price discounts, but we note that in many cases they will be coming from a higher point than the last holiday season and even last April. OLED TVs are certainly the exception, and indicative of LG’s higher capacity and lower cash cost, along with the need to generate unit volumes close to this year’s target. LCD brands however, are facing the ongoing problem of higher material and component costs, and while they might be willing to absorb some of those increases given their high utilization rates, they have been and will continue to be forced to pass those increases on to customers. Whether the consumer is able to ‘see’ the increases that have already been instituted or whether they show as less overall holiday discounting would depend on both panel price increases going forward and any effect component shortages would have on LCD fab utilization, but at least at this point in the year, it seems obvious that the TV set space has been feeling a bit of pain.
Aggregate TV Panel Pricing & ROC - 2019 - 2021 YTD - Source: SCMR LLC, IHS, Company Data
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