Flat-panel TVs signal new technology options

Published: 8/26/2007 12:01 AM

Buying a flat-panel television used to be an easy decision: The sets were straightforward devices that simply showed TV programs.

Now shoppers looking for a new flat-panel TV will increasingly be faced with a confusing array of choices. In the past two years, electronics makers from Hewlett-Packard Co. to LG Electronics Inc. have added new bells and whistles to their flat-panel TVs.

Some of the TV sets now come with embedded technologies that help connect to wireless home networks or Internet videos. Others now come with built-in digital video recorders. And in the next few months a new wave of options will hit retail floors.

Hewlett-Packard has launched 42-inch and 47-inch versions of its liquid-crystal-display TVs that come with the ability to connect wirelessly to a home network. The new sets, dubbed the MediaSmart TVs, can display those movies, music or photos stored on a personal computer in the network.

Later this year, Samsung Electronics Co., the largest U.S. LCD flat-panel-TV seller by shipments, also will launch a wireless flat-panel plasma TV that for the first time comes with a separate media hub that can be stored within 200 feet of the TV. Consumers can use the hub to wirelessly connect devices such as PCs and video cameras and game consoles to the TV.

Sharp Corp. plans to add networking technologies to its Aquos-brand flat panels next year.

For consumers, the new generation of flat panels is a step closer to the electronics industry's Holy Grail: a connected TV that can not only play television programming but also download films, music and videos from the Internet. A device that can meld all those functions is likely to be a winner in consumers' living rooms, where many tech companies are trying to gain a toehold.

In March, for instance, Apple Inc. released Apple TV, a device that allows users to beam movies, television shows and music purchased through Apple's iTunes Store on the Internet to their TVs and stereos.

Many of these new TVs may also be highly frustrating for consumers. Paul O'Donovan, an analyst for Gartner Inc., a market-research firm, warns that the market is in its early days for networking technologies. Since such technology in TVs isn't standardized, customers who buy the devices may get somewhat limited features that aren't compatible with other gadgets in the home.

For example, H-P's TVs can play music loaded from CDs into iTunes, but they can't play music downloaded from Apple's iTunes store because that music is encoded with protective software.

Also, the new flat panels have limited online content. They don't technically allow users to surf the Internet using their TV. Instead, they connect users to an interface with videos or movies from specific providers the TV maker has made deals with, such as CinemaNow Inc. or Yahoo Inc.

Still, the new accoutrements are being added to flat panels as TV makers try to stave off rapid price declines in the industry. The declines are being caused by the increasing commoditization of flat-panel TVs and rising competition between vendors wanting a piece of the action.

Last year, the average price for a 30- to 39-inch flat-panel LCD TV in the U.S. fell more than 30 percent to $1,477. This year, the average price for a flat-panel LCD TV 40 inches or larger is expected to drop more than 20 percent to $2,195 in the U.S. from $2,853 last year, according to IDC.

Analysts expect average selling prices of TVs to continue to fall, albeit at a slower rate. The average selling price of a TV 40-inches or larger in the U.S. is expected to drop to $1,186 by 2010 from $9,444 in 2003. Overall, sales of connected TVs are projected to rise to 21.3 million units in 2009, up from 1.6 million last year, according to market researcher iSuppli Corp.

Many of the new flat panels are priced as much as $500 more than standard flat-panel TVs. While Samsung hasn't released pricing for its new wireless TV yet, the company says the TV will cost roughly $500 more than standard Samsung TVs. Meanwhile, H-P's new 42-inch TV will retail for $2,200, while the 47-inch flat panel will cost $2,700. By comparison, those same models without networking technology sell for $1,899 and $2,299, respectively. As with most technology, prices are expected to fall over time.

The new options are giving some consumers retail fatigue. Matt Bunter, a database administrator in Lyon, France, has been looking for more than a month for a flat-panel TV to play American television shows he has downloaded onto his computer. He had originally planned to purchase an Apple TV for roughly $300, but then he saw a set-top box from an Internet-service provider that transmits digital content from the PC to the TV wirelessly. He also read up on H-P's wireless TVs.

"I'm a standard consumer, and I don't know all the ins and outs of all this sort of stuff," says the 35-year old. In particular, Bunter says it's confusing trying to figure out which solution to buy because all say they can perform the same functions. Bunter adds that while he's willing to pay up to $1,300 for a new television set, he wants to make sure he really understands first what he's getting for the money.

Some consumers may have more to worry about than just the TVs alone, since some of the new sets come with add-on devices.

For instance, Sony Corp. is launching its $300 Bravia Internet video link, a 1-inch- thick device that connects to the back of Sony's flat-panel TVs. The gadget allows viewers to connect to Internet videos from content providers such as Yahoo and America Online, as well as music from Sony's music division.

For some consumers, the new accessories add up to too much useless technology. Denise Tippit of Stockbridge, Ga., for example, wants to spend less than $2,500 to purchase a flat-panel TV for her family by the end of the year. But the 47-year-old professional photographer says she isn't interested in Internet TV.

For her, the most important feature of any new TV is its picture quality. "I'm really just drawn to the color in the TV," she says.

For others, like Zeljko Zidaric, a product manager for a wireless-telecommuni-cations company in Toronto, the new flat-panel TVs don't go far enough. Zidaric purchased a 37-inch H-P MediaSmart TV last November for more than $1,700. He says the TV was easy to set up and worked great for playing TV shows and other content he had downloaded from his computer. But he sold the TV in March because it didn't allow him to surf the Internet.

"I wanted more than what the TV could offer," Zidaric says. Today, he uses a desktop computer to connect his Samsung plasma TV to the Internet.