More electronics price cuts coming?

by Dan Westell, CBC News Online

The prices for many consumer electronics products plunged in 2006, the New York Times reported in the wake of the Consumer Electronics Show in Las Vegas last week. Citing Consumer Electronics Association economists, the paper said big-screen plasma TVs were down 32 per cent, notebook computers fell 35 per cent and video players for cars dropped by 65 per cent.

Big manufacturers don't like those kinds of numbers, but the declines may continue this year, the paper said.

The reason? Smaller companies in places like Taiwan and China that will cut prices to keep operating at full capacity.

Sales of Olevia TVs, for example, which were priced 20 per cent below market leaders, doubled in 2006. The company that sells them, Syntax-Brillian, uses the smaller suppliers and expects "very aggressive price reductions throughout the year,” chairman and CEO Vincent F. Sollitto Jr. told the paper.

Big manufacturers sound resigned. Robert Scaglione, a top marketing executive at Sharp Electronics, wants to believe that big-screen TV prices won't fall as much this year, but concedes: “I can only hope they won’t.”