Tuesday, May 15, 2007
Basically, while there has been strong consumer demand for flat panel HDTV sets, many manufacturers overestimated the overall consumer demand for the devices. As a result of this miscalculation, many manufacturers made way too many of the sets and some manufacturers who previously hadn't made TV's jumped in with their own products in an attempt to get part of the action. For example, Polaroid, Gateway, and Dell began manufacturing their own sets. As a result of the drastically increased number of TV sets on the market, retailers have been forced to sell the flat panel HDTV sets at much lower prices than they had planned for, and those discounts have severely cut into the profits of of both retailers and manufacturers.
The type of technology that has been hurt the most by this miscalculation of the market has been Plasma screen technology. Plasma screens are made up of thousands of pockets of gas that each make up a pixel on the screen. When an electrical current is applied to one of these pockets, the pocket glows at a certain color depending on the voltage and amperage applied to it. Together, all of the individual pockets of gas make up the TV picture. The result is not only an incredibly vibrant picture, but also a screen that makes it difficult to decrease production costs. The fact that Plasma screen HDTV sets still cost a lot to make- even though market pressures for them to be sold at low prices- make it difficult to make a profit on the devices. LCD screens have also produced disappointing revenues, but the problem hasn't been as bad because manufacturers have found ways to cut the production costs of LCD HDTV sets.
One thing that has to be frustrating to manufacturers is that even though they don't make as much money as they'd like to on Plasma screen TV sets compared to other HDTV sets, consumers still want to buy at least as many Plasma screen HDTV sets as LCD screen HDTV sets. A recent unscientific survey conducted through TVPredictions.com found that a slight majority of consumers think that Plasma screens produce the best HDTV picture, but almost as many respondents said that LCD screens provided the best picture. A smaller- but still comparable- number of respondents said that DLP rear projection HDTV sets produce the best picture. As small minority, about five percent, said that they were all about the same.
If any one thing can be interpreted from this poll, it's that demand for any one type of HDTV set won't be going away anytime soon. That could continue to spell the continuation of disappointing revenues for HDTV manufacturers, but at least people haven't decided to stop buying the more profitable LCD flat screen and DLP projection screen HDTV sets in favor of the less profitable Plasma display flat screen HDTV sets.