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CES: Costly TVs pave the way for innovations

4K sets target videophiles with $20,000-plus pricetags

Being an early adopter on the cutting edge of technology has never been cheap. And the new TV sets heading soon to retailers come with a hefty pricetag, making the cost of a state-of-the-art home theater steeper than ever.

For example, Sony’s 84-inch ultra high-definition set that displays in 4K costs $25,000. The more budget-conscious consumer can pick up LG’s 84-inch 4K set for just $19,999.99.

To put that into perspective, the price of the Sony set is more than six times as much as Sharp’s 80-inch LED HD TV.

Even Sony admits the price is beyond the point that most enthusiasts are willing to pay. However, that’s not stopping people from lining up for the hardware.

“Our 84-inch is at the extreme end of the market,” said Mike Lucas, senior VP of Sony Electronics’ networked technology and services unit. “We’ll get that to a point for the premium market in the not so distant future. We’ve got a waiting list for the set. We’ve been very pleased with what we’ve seen as far as demand so far.”

The new 4K UHD TVs aren’t the only technology that will carry a stratospheric pricetag.

OLED TVs from Samsung and LG are a bit late to the market, but when they arrive this year they’re expected to cost over $9,000 each.

High prices for such technology are, of course, nothing new. The latest and greatest TVs always come at a rich premium as manufacturers prove the viability of the concept. That’s if they even become available: Some technologies, like liquid crystal on silicon, never make it far beyond CES.

But when prices fall, they plummet.

The first plasma TVs went on sale in 1997, when Philips rolled out a 42-inch set with resolution of just 852×480. The price was $14,999. On Black Friday last year, an RCA 42-inch plasma set (with a notably better 720p resolution) sold for just $199.

Similarly, the first LED TV — Sony’s Qualia 005 — hit the market with a price of $12,000 in 2005. Last November, a 50-inch LG model sold for just $300.

High-priced TVs are hitting the market as the electronics biz attempts to get consumers to upgrade their current flatscreens.

“It’s a confluence of events,” said strategic innovation consultant Scott Steinberg. “What you’re seeing is a number of new technologies beginning to enter the consumer market. From the standpoint of shock and awe, it’s going to be a good year at CES, because everyone is trotting out those new models. The problem is it’s going to be quite some time before costs go down and they reach a mass market price level.”

Initial cost is also seen as a way for companies to squeeze any profits from videophiles before lower and mid-range TV makers like Vizio pressure hardware makers to lower the retail costs of high-definition sets.

“Hardware is becoming increasingly commoditized,” said Steinberg. “The way manufacturers are countering this is they’re looking to provide premium sets around new features, then piggy back on these new technologies and trends and make a tidy profit off of them. Because they’re getting squeezed on the low end, they’re trying to create a premium product that appeals to luxury shoppers.”

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