Emerging Technology

Electronics prices set to soar in early 2009

SmartCompany /

The prices of televisions and other electrical goods are set to soar by 30% in the new year, as electronics manufacturers put up prices and the Australian dollar continues to slide.

The prices of televisions and other electrical goods are set to soar by 30% in the new year, as electronics manufacturers put up prices and the Australian dollar continues to slide.

Manufacturers such as Sony, Panasonic and Samsung have all flagged higher prices in the new year, arguing they cannot maintain profitability at current price levels.

Manufacturers are also marketing sales packages with games consoles and Blu-Ray players in an attempt to clear out stock.

Samsung is offering a free Blu-Ray player with any HD LCD or plasma television purchased until Christmas Eve, while Panasonic is offering a Nintendo Wii with any VIERA plasma sale.

Toshiba is marketing a $799 Netbook computer with some of its LCD televisions, while LG is offering a bonus 26-inch LCD valued at $949 with any purchase of selected LCD or plasma models.

The sales bundles are also an attempt to capture much of the money spent from the Government’s $10.4 billion stimulus package.

Retail analyst Rob Lake says the impending price rises are all “a currency issue”.

“I’m not at all surprised about this,” Lake says. “These manufacturers just have to deal with the dropping exchange rate. We’ve gone from being almost equal to nearly $US60 cents… it’s amazing.”

Lake says manufacturers also have to deal with the devaluation in LCD and plasma televisions, and lessening demand.

“You look at a plasma television that used to cost $12,000. It now costs $1000 or $2000. Prices of electronics fall over time; as new technology gains acceptance the price falls. Now you can pick up some of them for under $1000 a screen.”

Ruslan Kogan, founder of online technology retailer Kogan Technologies, says this fall in prices in the past few months has been helped by tax cuts in China where major manufacturers are based.

“The dropping exchange rate has been combated by the fact the Chinese Government has made an initiative to increase the input of digital televisions. As a result, they’ve given breaks to the industry like tax cuts in order to increase the number of panels produced and sold to drive the prices down.”

Kogan Technologies assembles electronics with components from different manufacturers and sells them online without overheads. But despite the Chinese tax breaks, Kogan says his company has been affected by the falling exchange rate.

“We were affected by exchange rates a lot quicker. We were selling goods in November we manufactured in October and paid for in October, whereas big manufacturers were selling goods that were built in July.

“The products they’re about to sell, they manufactured six months ago. Their lag time is about three or four months, whereas ours is under a month.

“Now they have to deal with stock bought at a higher price.”

However, not everyone believes prices are on the way up. JB Hi-Fi chief executive Richard Uechtritz told SmartCompany last month electronics prices will likely remain static.

“I don’t think we’ll see too much movement. You might see a slowdown, but I very much doubt if you’ll see price increases,” he says.

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