Inside the LCD TV Price War

There’s only one publicly traded American company focused on manufacturing televisions, and you may have never heard of it. One thing is for sure, Sony has. Upstart Syntax-Brillian, maker of the Olevia line of LCD tvs is disrupting the market and driving prices lower by offering their TVs at or below cost. From the NYT:

On the day after Thanksgiving, Mr. Sollitto, the chairman and chief executive of Syntax-Brillian, had 32-inch Olevia liquid-crystal display TV sets selling at Circuit City for $475, almost half its regular price.

Syntax almost certainly lost money on the TVs. The flat screen that makes up about half the cost of an L.C.D. TV is about $350 on its own. But Mr. Sollitto could not have been more pleased. The Olevias outsold Sony and other brands while they lasted. That forced the premium brands to lower prices throughout the holiday season and take notice of the upstart from Tempe, Ariz.

There is a battle going on for the LCD TV market, and retailers are taking the brunt of the price war. Circuit City in particular is feeling the pinch. The only ones “not hurting” are the consumers. And it’s going to get better:

For example, the price of a 37-inch panel has fallen to $476, from $690 a year ago. Sweta Dash, an analyst who tracks panel prices for the market information company iSuppli, expects them to drop to $375 by June, presaging even bigger discounting at the retail level for those TVs in the next few months.

Price wars! Time to start saving for that new TV this summer. —MEGHANN MARCO

The No-Name Brand Behind the Latest Flat-Panel Price War [NYT]

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  1. chimmike says:

    Sweet. It’ll finally be practical to get an LCD tv and replace the good ole CRT that has provided such good use. (Am I the only one without an LCD tv now, though?)

  2. Falconfire says:

    Syntax almost certainly lost money on the TVs. The flat screen that makes up about half the cost of an L.C.D.

    Im sorry but in this case I highly doubt that. Unlike the gamer market, there is very little incentive for them to sell TVs at a loss.

    For one thing, there is no catch, people arnt going to buy a TV and get hooked on other items like they do with printers and game systems.

    Second in the TV market, its not about how many sold as much as quality.

    I suspect the truth is, they decided to not play the Oil game and sell the TVs for a little bit more than the actual cost, which in the end is making the big guys shit a brick because they all though they could play it safe by keeping their prices high and around each other.

  3. Falconfire says:

    “They’ve accelerated the price compression and the reduction in profitability for everyone across the board.”

    That right there proves my point. They didnt lose money at all, they just made LESS money, which is making the big guys pissed because now THEY TOO are forced to make less money.

    Hate to break it to them but welcome to buisness.

  4. Dustbunny says:

    chimmike: No, you’re not the only one who doesn’t have an LCD tv. I’m waiting for prices to drop lower still…not to mention that you have to do too much homework before buying one. I just want to look at the tv with the prettiest picture and say “Me want!”

  5. I love it! Plus, more LCDs means less CRTs which means less energy consumption, a win-win.

    I always thought retailers took a smaller margin on big electronics so that they sell higher margin but smaller priced products like DVDs to compensate. Get them in on the $400 off 60″ LCD but have them walk out paying 40% more on that latest boxed set of Gilmore Girls.

  6. shoegazer says:

    @Falconfire: It’s perfectly reasonable to assume they DID lose money on the almost 50% price cut on their 32inch TVs last Thanksgiving. These sets were probably assembled with LCDs bought at a higher price in order to drive up sales volume and brand visibility.

    Olevia can then negotiate deeper discounts for future contracts with the LCD suppliers, and recoup some of the losses on the earlier sales. As the NYT article points out:

    “(Olevia) is essentially taking a ride on the falling prices of flat panels, the main component in the TVs, and the drop has steepened because of a glut.”

    This means a panel bought this year in bulk can be assembled for LESS than their $475 sale price last year.

    And as for big guys, bricks and shitting: Sony did damn near the same thing when marketing their 1st-gen Bravias which had R&D that drove the “magic” cost of goods sold (COGS) number beyond the sale price. They completely wiped the floor with the Panasonics who dominated back then; now every Bravia is sold at a hefty markup to recoup those costs.

    welcome to business, indeed.

  7. eltonito says:

    Wait, people actually shop at Circuit City?

    I just unboxed an Olevia 37″ last week and I have to say it was a good purchase. It has favorable ratings and costs considerably less than anything else I could find with similar specs, short of the Vizio line which has lesser availability in my area.

    This article really makes me feel more positive about my purchase of what I considered an off-brand, even if it would’ve been considerably cheaper in a few months.

  8. shoegazer says:

    @pfblueprint:

    more LCDs means less CRTs which means less energy consumption, a win-win.

    sadly, most people are replacing 20″ – 26″ CRTs with 42″ – 55″ monstrosities which end up consuming even MORE power. You only really see big savings when switching from Plasma to LCD for the same screen size.

  9. nick says:

    I bought a 27″ Syntax Olevia LCD TV from Amazon.com back in January ’05 when they really were an unknown company, and it has been the best tv I have ever owned.

    (Not to mention the fact that it was hundreds of dollars less than the nearest competitor. Go Syntax!)

  10. dclounger says:

    Re: whether or not they were taking a loss on the sale of the LCDs at that price.

    The CEO was on CNBC last night and he said that they did not take a loss on any of the sets sold.* The “*” is that the stores selling them (which, it was pointed out, are few, but growing) decided to use those LCDs as their loss-leaders to get people into the store. In other words, the manufacturer did not take a loss on the LCDs, but the store did. Nevertheless, he predicted that LCD prices would drop by 20% by the end of 2007.

  11. segfault, registered cat offender says:

    The 32″ Olevia that Consumer Reports reviewed had good picture quality but only had 1 HDMI input and 1 component video input. That’s not enough to connect an HD cable box, Apple TV, and a DVD player.

    After some experience with Sony’s user interface, I want a TV that allows me to add only the video inputs I use to the channel list, so that I don’t have to hit the “video input” button eight times to switch between antenna and the seven video inputs sequentially–several of which aren’t used.

  12. Juancho says:

    @pfblueprint:

    Retailers will typically use CDs/DVDs as a loss-leader the first week they are out to get you in the store, and they sell new releases at a discount for the first month or so. Then the price goes closer to MSRP, and as the product gets older (6mos-1yr, the time may vary), the price will come back down. So obviously, they make the most profit in that middle zone.

    They make most of their profits on things like cables and other accesories, as well as extended warranties.

  13. Starfury says:

    I don’t have an LCD TV, we’ve got a 32″ and 26″ CRT TVs. Both still work and I’d have to replace furniture to “upgrade” to an LCD.

    I’m not that impressed with them either, you have to be sitting pretty much directly in front of them to get the best picture. And with so little good TV there isn’t a reason for me to spend any $$ until my set(s) die.

  14. shoegazer says:

    @Starfury – Did you mean the Olevia in particular, or LCDs in general? because the Sonys and Samsungs of the world have a 170 – 178 degree viewing angle, which means they are equally clear from almost every angle that a comparable CRT is, sometimes moreso. Not a fanboy or anything, but sometimes you do get what you pay for.

  15. aka Cat says:

    I have an Olevia 37″ HDTV, my parents have a 23″. Both have an excellent picture viewable from a fairly wide angle.

    And they each cost 1/2 to 1/3 the price of comparable sets.

  16. coraspartan says:

    Grrr…this really pisses me off. Why? Because we bought a 32″ CRT in August when our old 27″ just up and died for no reason. I think we paid $399 for the new 32″, which means we could have had an LCD, according to the this article, for LESS than what we paid for our CRT. Of course, if we had waited, we would also have been without a TV for almost a year. Not possible. It still burns my butt, though!

  17. 44 in a Row says:

    The 32″ Olevia that Consumer Reports reviewed had good picture quality but only had 1 HDMI input and 1 component video input. That’s not enough to connect an HD cable box, Apple TV, and a DVD player.

    After some experience with Sony’s user interface, I want a TV that allows me to add only the video inputs I use to the channel list, so that I don’t have to hit the “video input” button eight times to switch between antenna and the seven video inputs sequentially–several of which aren’t used.

    Two things I’ve come across in my preparations to buy an HDTV. First of all, only having one HDMI input is a pain, but you can get cheap switchers from Monoprice; it’s annoying to have to pay an extra $75 for the switcher, but it seems like only TVs at the next price level ($1000-plus) have two HDMIs, and even then you’re still short an input. I don’t recall ever seeing an HDTV at a reasonable price with more than two HDMI inputs, but I certainly wouldn’t swear to that.

    Second of all, the Westinghouse I looked at (32w6, their standard 32″ LCD) has separate buttons on the remote for each input. It’s a little thing, but I really liked it.

  18. AcidReign says:

    …..I’ve got a 1997 model Zenith 27″ CRT TV that works just fine. The broadcast quality of Charter Cable is so poor that any high-def option just means that you’ll see the snow better! And is it me, or are the new flat-panels dim? They sure look dim in the store. I hate a dim TV picture! I like to wind those brightness and contrast controls up!

    …..I’ve also got a 1970 model GE 13 inch that still works, too, but you have to slave an old VCR to it to get all the channels…

    …..I do have some experience with flat panel computer models. We’ve got a 2000-era Gateway 15″ flat panel that is pitiful on video, and you have to be RIGHT in front of it to see it. The screen on our old Acer laptop is even worse, and it’s REALLY dim, especially on battery power. The screen on our newer Lenvono Thinkpad is a lot brighter, and a bit better on video. And the 19 inch flat panel that came my HP Media Center PC has a pretty decent level of brightness and clarity, and you can see it from all sorts of different angles. It’s definitely the best thing we’ve got for watching DVDs!

  19. SexCpotatoes says:

    I took a gamble on a Walmart LCD… 42″, one HDMI, two component, one composite, and the best part is the VGA input. I’m browsing the internet, watching online video (and all my dvr/pvr recorded shows), commenting on consumerist, all on a 42″ screen, from my couch. I got an open box deal, and paid, just over $1000 after taxes. This was a much, much better deal than the $4000 37″ Sharp Aquos my best friend picked up a few years ago. I know I’ll be kicking myself about buying it as soon as comparable models go cheaper than what I paid, but overall I am ecstatic about this beautiful television… I just hope this “ilo” brand lasts… as I haven’t been able to find much documentation or reviews online anywhere.

  20. azpete says:

    Olevia is no good.
    I bought a 23 inch model which also served as a computer monitor. It fit well in my desk, but it just died one day. You could not turn it on. Still under a warranty I was able,after numerous phone calls to India,Pakistan,El Salvador and finally California get a permission to return the Tv for a service. It “only” cost me 21 bucks for a shipping from AZ. to CA. After about 3 weeks of silence I had to call again to India,Pakistan,El Salvador and for about a week nobody could tell me what happened to my Tv. Then they said that it could nt be fixed and they will send me a 26 inch model which is much better and an upgrade.
    I have said that I do not want 26 inch model because it will not fit in my office desk. That’s why I bought a 23 inch model to begin with.
    Few days later I have received a replacement. The same model… worked for a day and then the same problem,it does not turn on,at least at this point not all the time. It has to be unplugged overnight and then the next day it works for few minutes and it’s dead again. I have e-mailed Syntax nad asked for a refund. I have no longer a confidence it their products. So far,no reply from the company. We’ll see what the next week will bring.Stay away if you can.
    I am using my old 19 inch Samsung Tv/monitor again and it works for some 5 years now.

  21. azpete says:

    Finally.August comes and after more not”too much sense”converstations with India customer service I have received a 26 inch model which actually fits my furniture.The repalacememt Tv is working so far and it came with 90 day warranty.Good by Olevia.