JAPAN: Could tumbling prices mean the big names' 3D strategy isn't going to plan?
So you thought 3D TV was all about bringing a more involving home cinema experience into the home? Think again: for the big names in consumer electronics, it was all about restoring some profitability into the TV market in the face of relentless downward pressure on prices.
By launching 3D, the likes of Panasonic and Sony planned to reinvigorate the concept of the premium-priced TV, rather than being cornered by consumers' hunger for the biggest bang for the buck – the largest screen they could get for the least money.
And to an extent it worked: both Panasonic and Sony have turned around loss-making TV divisions to profitablity, helped by interest in 3D and demand created by the recent World Cup.
Prices on the slide
However, it seems in Japan things aren't quite going to plan: reports in the influential Nikkei business daily show that prices of 3D TVs have already fallen some 20% since they were launched a few months back, and even new models are seeing rapid falls.
The Nikkei reports that Panasonic's 50in 3D set, which hit the shops in April at Y430,000 (£3225), is already down to as little as Y310,000 (£2325) in some volume stores in major Japanese cities, and is generally selling for less than Y350,000 (£2625).
Meanwhile Sony's 40in 3D LCD is currently selling for under Y250,000 (£1800), again 20% less than it was when it hit the shops less than two months back, and while the price of Sharp's 46in offering is still around the Y360,000 (£2700) at which it launched last month, it's expected this will also fall in line with other 3D sets in the near future.
Good news all round for consumers? Maybe, but the original plans of the top consumer electronics companies were for 3D sets to command a 50% premium over conventional sets of the same size, thus helping the corporate bottom line.
Now, that premium is tumbling to something nearer 20-30%, and industry observers suggest the arrival of more 3D Blu-ray discs on the Japanese market, and the traditional acceleration of sales toward the end of the year, can only see increasing pressure on the current pricing.
An 'end of scrappage' boom?
What's more, it's hoped that the year-end will see a boom in TV sales in Japan, as government schemes to encourage consumers to trade in their old sets for more energy-efficient models comes to an end. If that doesn't happen, prices may fall further.
Of course, the lower prices are encouraging if 3D is to gain extra traction in the market, but are also likely to cause concern among manufacturers seeing the value consumers place on 3D TV heading south in almost unstoppable manner.
After all, if 3D is no longer viewed as a premium product, but the norm, such commoditisation is likely to see an acceleration of price-cuts, as has happened in the conventional TV market.
At which point, we may see some of the biggest brands in consumer electronics frantically looking around for a Plan B...