(c) IHS

The chart above shows a breakdown on costs of TVs. The grey line is the average price for a premium quality brand, and the blue line is the average price for a white-label secondary brand. And the red line is the price of the panel. (All these are for 1080p, since UHD was a rare thing (and crazy pricey) at the start of the time period.)

So as you can see, for both 55-inch models (above)  and 32-inch models (below), the profitability is in crisis. As recently as mid-2015 the 32-inchers were around US$80 cost, with the premium guys selling up at US$200. Then fast-forward to Jan 2017, the cost is back at US$80 dollars, except now they’re selling the TVs for perhaps $165.

“And now people are starting to say ‘no bid’,” says Paul Gray of IHS, which furnished us with these charts.  

(c) IHS

Paul Gray. IHS“Obviously you know most of the trends”, Gray told us at the recent IFA Global Press Conference held in advance of IFA 2017 in Berlin. “TVs are getting bigger, there’s more and more pixels on them and they’re getting brighter and deeper colours and everything like that, and up until recently the prices have still been falling… and on a per-feature basis they still are.

“And yet panel prices are really at the levels they were two or three years ago — so they’ve gone down and they’ve come back up, whereas TV prices haven’t. And this year I think it’s very likely that those panel price rises that we’ve seen in the last six months will come through to retail, and that’s going to be an incredible challenge for the industry that has up till now always been using size as a way to grow the business.”

According to HDGuru.com, quoting another IHS researcher Paul Gagnon, it’s all exacerbated by an industry-wide shortage of LCD panels, including Samsung closing a Gen 7 LCD plant, Foxconn stopping LCD panel sales to Samsung, Hisense and others. The Foxconn story makes fascinating reading over on HDGuru here

The result of all this – fewer promotional deals, and quite possible retail price rises following the next pricing negotiation with US chain Best Buys. If you’re thinking of buying a TV in the near future, you might save money by buying now, rather than later.

Charts © IHS Markit.