Plasma makers go bananas over Labor Day Weekend

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The Christmas selling season began in earnest over the long weekend, with Panasonic getting the jump on the competition, followed by Hitachi and HP. Doubtless other first tier brands will be following suit this week, lending support to their retail partners by offering cost drops and new volume incentives.

Now that the flat panel revolution has drawn to a close (hint: the flat panels won), the next phase, like all revolutions, will be an intensification of the struggle between rival factions: in this case, LCD vs Plasma. I don't believe that one technology is markedly superior to the other, and I think that there is a place at the table for the benefits both types of video display offer. But many other people inside and outside the industry believe that a showdown is inevitable, so it may well come to pass. My prediction is that we'll see some extremely agressive pricing this fall as first tier Plasma and LCD makers jockey for position to drive their market share as we head towards the post Hallowe'en selling seaon.

Rambling personal annecdote time: Fall 2001 was the first truly monster Christmas for DVD players. In 1999 manufacturers had grossly undershipped, and in 2000 prices eroded and sales climbed, picking up steam, but not yet approaching the zenith of the sales curve. In Fall 2001, the manufacturers committed 110% to production and agressive pricing, and the unit sales across the category were huge. I remember this time vividly, because in the two weeks bracketing Hallowe'en I had to redo the price tags on our entire wall of DVD players an average of six times per sku, as the vendors played price point Limbo: driving each other to go lower, and determining who would be able to hit the then-magical price point of $200 for a name-brand DVD player. If I recall correctly, it was Toshiba that got there first. Not only that, but they packaged each DVD player with 2 Warner Bros. A-list movie titles. Wild times, those were.

The lesson here is that once the CE industry has sold the marketplace on a technology, which they have done, and dug in, as it were, that's when we start to see intense price competition as the manufacturers attempt to buy market share. The goal by the end of Boxing Week 2006 is to have more of their flat panel displays in people's houses than any other brand.

I'm expecting consumers to squeeze the last drops of cash liquidity from their home equity in advance of the looming burst of the housing bubble, and treat themselves to a 55" widescreen plasma tv this christmas, so they can watch the ugly economic news on MSNBC next spring in style.

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