With relatively low marketplace penetration and much anticipation about the emerging flat panel television market, the two technologies driving this market are large (10-inch+) screen liquid crystal display (LCD) and plasma display panel (PDP) devices. In practice there is not much competition between the two formats, with LCD televisions typically available in sizes below 40 inches and PDP televisions available in sizes 32 inches or greater. Together, these two technologies comprise the flat panel television market. Both have different attributes, but are positioned similarly in terms of application for home use.

The development of this market has changed rapidly since LCD and PDP technology was launched for consumer television applications in the late 1990s. As an emerging technology, flat panel televisions have experienced--and will continue to experience--significant levels of new product development, new supplier entrants, technological advancements and a gradual decrease in prices. In 2004, the average price of a 32-inch LCD television is approximately $3,500 and 42-inch plasma televisions are priced around $5,000.

Consumer attitudes and preferences have greatly impacted the way in which the flat panel television market has developed. Suppliers have developed products to align flat panel televisions with stylish consumer tastes. However, with numerous entrants in the market, suppliers will likely encounter periods of oversupply as the market emerges, resulting in discounting and other pricing activities at retail. Evidence of this includes a Wal-Mart return of nearly $200 million in overstocked LCD televisions to Samsung in 2004. In the end, discounting to relieve overstocks will result in lower prices. Production efficiencies will also contribute to declining prices. Overall, this emerging technology is evidently on the path to becoming a mainstream category.

This report covers televisions that do not use a cathode ray tube (CRT), allowing for a structure with limited depth. The products use either liquid crystal displays or gas plasma to create the television images. Picture content exceeds the resolution of standard definition (SD) television—mostly CRT analog—by providing: more lines of resolution (either 720 vertical lines or 1,080 vertical lines); surround sound content instead of stereo content; increased color clarity; and audio content with superior frequency and dynamic ranges.