For those who have been wanting to junk their old television sets in favour of swanky LCD and plasma screens but couldn’t do so because of the latter’s prohibitive

Enticing buyers:TVs on display at a Home Town store in Noida. Prices of such high-end sets have dropped 35-40% in the past three years.

“A 32-inch LCD TV priced at Rs1.12 lakh in 2005 is now selling at Rs45,000," said V. Ramachandran, director, sales and marketing, LG Electronics India Pvt. Ltd. “In the LCD and plasma TV segment, there has been a drop of approximately 50% since 2005," he added.

LG’s rivals have also cut prices substantially. Samsung Electronics India Pvt. Ltd is currently selling a 42-inch plasma screen for Rs90,000 as against Rs1.21 lakh last year and Rs1.64 lakh in 2005. Mirc Electronics Ltd, the company that sells its products under the Onida brand name, has cut prices in the flat panel segment by 40-60%. “Last year, we were selling LCD screens for Rs70,000-80,000, this year the prices have come down to Rs40,000-50,000 for 32-inch category," saidGulu Mirchandani, chairman and managing director, Mirc Electronics.

Industry players say the price cut has been led by an impressive growth in sales in these high-end product categories. “The drop in prices in the flat panel segment is because consumer electronics companies have recovered their initial development costs associated with manufacturing. Now, they are in a position to achieve economies of scale," said Suresh Kumar, secretary general, Consumer Electronics and Appliances Manufacturers Association. LG claims to have sold 47,000 units till July 2007, as against sales of 27,000 units in all of 2006. “The steady drop in prices has been thanks to a high growth in volumes," said Ramachandran. Ditto for rival Samsung. “The flat panel TVs have shown a growth of around 290% in 2007 so far as against the previous year," said R. Zutshi, deputy general manager, Samsung India.

The drop in the prices of high-end products has had a cascading effect on the conventional TV segment as well. “In the next few years, there will be no demand for curved or conventional televisions, which is why companies are clearing their stocks," said Narayanan Ramaswamy, director, KMPG Advisory Services. The prices of these TV sets have dropped 35-40% in the past three years; a conventional set that cost around Rs8,000 in 2004 is currently available for Rs5,000-5,500 this year, according to dealers in New Delhi.

Buoyed by the growth in the segment, the companies are focusing on product innovation. Samsung, for instance, claims to have introduced 13 new models in the current year itself. “Product innovation is one of the key factors driving market expansion," said Zutshi. Similarly, Mirc Electronics has introduced some new products. “We just launched our 21-inch Ultra Slim TV, and will soon be launching the new indigenously-designed LCD range," said Mirchandani.

However, companies say that because prices have already come down so heavily, they will refrain from introducing any promotional or discount schemes in the coming festive season. “From a manufacturers point of view, I don’t see any room left for further price drops," said LG’s Ramachandran.