House brand TVs destroying margins, 3D and IPTV growing in popularity

By Patrick Avenell

The uptake of private label, or ‘house brand’, flat panel TVs is destroying average sales prices and margins, according to an analysis of the category obtained by Current.com.au.

Although generally considered to be of inferior quality to established name brand products, private label TVs now account for almost 25 per cent of units sold in the category, according to Rob Blythe from Macquarie Securities Group.

“While the branded flat panel manufacturers scramble to drive or maintain market share outcomes, we note that the level of retailer private label flat panel products growing share to now representing almost one in every four flat panel units sold, driving down average sell prices in the category,” Blythe said.

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According to GfK, the average sales price (ASP) of LED TVs declined by 56 per cent in the 12 months to February 2011. In LCD TVs, the ASP dropped 29 per cent in the year to March 2011.

Blythe has noted some good signs, however, with new features such as 3D and IPTV attracting sales at the premium end of the market.

“In recent months, trade feedback suggests that there have been a few glimpses of hope that may reduce the rate of price deflation,” he said.

“Adoption of additional features and benefits seem to be on the rise with approximately one-third of living room sized flat panels (32-inch and above) being sold with 3D technology.

“This has also had the effect of increasing panel size to make the most of features and benefits sold.”

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