IPads Soon to Be Pricier Than Large-Screen Televisions: Chart of the Day
Television prices have fallen so much that a typical set will soon cost less than an Apple Inc. (AAPL) iPad that’s less than a tenth the size.
The CHART OF THE DAY shows average prices of 42-inch liquid-crystal-display TVs in the U.S. will probably fall 10 percent to $599 this quarter from a year earlier, and slip to $578 by the end of the year, according to Santa Clara, California-based research firm DisplaySearch. IPad tablet computers are sold for $499 to $829 in the U.S., with Apple offering the Wi-Fi only, 32-gigabyte version for $599.
The price drop illustrates why none of the industry’s five- largest producers, including Samsung Electronics Co. and Sony Corp. (6758), have managed to generate even a nickel of profit for every dollar in sales from their TV divisions since last year. Falling prices will likely continue pressuring earnings, said Jeff Loff, a Tokyo-based analyst at Macquarie Group Ltd.
“The value consumers ascribe to a TV set is lower than most manufacturers’ costs,” Loff said in a phone interview. “Even incremental features like 3-D, Internet connectivity and enhanced motion processing do not generate enough of a price lift to turn TV sets profitable.”
In the U.S., the first color RCA-brand TV with 12-inch screen was offered at $1,000 in 1954. Suwon, South Korea-based Samsung, now the largest TV maker, began offering 40-inch LCD sets for about $8,000 in 2002. Sharp Corp., Japan’s largest LCD maker, retailed the company’s first 45-inch sets in 2004 at 997,500 yen ($13,000).
Apple, whose co-founder Steve Jobs resigned last week as chief executive officer, has kept iPad prices unchanged since it introduced the first model in January 2010.
To contact the reporters on this story: Takashi Amano in Tokyo at tamano6@bloomberg.net; Mariko Yasu in Tokyo at myasu@bloomberg.net; Minh Bui in Tokyo at mbui@bloomberg.net
To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net
Aug. 30 (Bloomberg) -- Scott Kessler, head of technology equity research at Standard & Poor’s, talks about the impact of back-to-school sales on the technology industry. Kessler, speaking with Betty Liu and Hitha Prabhakar on Bloomberg Television's "In the Loop," also talks about the sales performance of Apple Inc.'s iPad. (Source: Bloomberg)
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