Originally Posted by Whatstreet
You have selected attractive price points. When do you think this might happen?
Today, we're at about $5000/$3000 for flat models (I'm discussing real prices, at major retailers like Amazon / Best Buy. While it's good to know about better deals, especially from reputable discounters like forum sponsor Cleveland Plasma, those are not reflective of the deals most people will ever obtain)
It's also worth noting that the 1080p 55-inch can be had for ~$1,800 pretty easily I believe, which would be tantalizing for someone who (a) didn't mind a curved screen (b) needed just a 55-inch display.
Anyway, historically, we've seen ~30% price drops on technology that sees rapidly falling prices. That doesn't tell us much about what happens in a given single year, however. So it doesn't for example inform us that next year's prices will be $3500/$2100. Nor that the year after's will be $2500/$1500.
That said, to get from $5000 to $3000 only requires 25% compounded declines over a couple of years. That feels pretty doable. (n.b. I'm quite confident LG will offer a 65" OLED for not only $2500, but even $2000 before the decade is over*. The vast majority of 60" TVs sold are now $1200 and less. For even 70", the vast majority of sales are well below
$2000. LG cannot hit its sales goals without 65" TVs that are $2000, if not cheaper.)
The significance of the $3000 price point is that -- for several years -- it represented the price at which a state of the art plasma could be found on sale. In short, it was sort of a high-water mark for volume TV selling and therefore a short-term maximum for LG to attract notice that it's 65-inch OLED is "something you can really buy." I think the $4000 TVs sell in far, far lower quantity than nearly anywhere hear believes. I don't actually believe they are mostly intended for sale, but rather to promote less expensive models.
Anyway, I digress... Two years seems very doable for that decline. One year does not seem completely impossible
The 55-inch models are trickier. I don't believe -- for a number of technical reasons -- that the 4K models are inherently more expensive to make than the 1080p models by more than perhaps $20-50. And the only reason for the delta is that the semiconductors aren't in as high volume and the bill of materials is slightly higher overall. In the short term, yields are likely lower but that's not inherent.
As we've already seen 55-inch models comfortably below $2000 at retail, I think the $3000 price of today's 4K model is somewhat artificially high. If we apply the 30% reduction twice, you'll see we still get there in 2 years ($2100, $1500)**. In the 55-inch category, I'm actually skeptical there is a market above $1500 today that has any real volume. There might be some small amount of volume at $2000, but I think it's quite a bit smaller than -- again -- most people at AVS believe.
LG is seeking volume increases that amount to more than doubling in 2016 and then something similar in 2017. You can't make people up their spending in TV so you'll have to meet them at prices they are willing to pay.
I look forward to it.
* Assuming, of course, they keep making OLED TVs on the expected capital expansion trajectory.
** Yes, I can do math. Yes, I also round off for simplicity.