The U.S may be struggling with one of the worst economic downturns in modern times, but electronics giant Samsung says that consumers are still willing to pay top dollar for state-of-the-art TVs. The Korean firm recently unveiled a slew of flat-screen LED TVs, touting the technology as the next big thing in home entertainment. The ultra-thin screens use edge-mounted LEDs to boost contrast and image quality, and they also consume 40% less power than similarly sized LCD TVs, according to Samsung. LED TVs undoubtedly offer crystal-clear image quality, but they do so at a price. Samsung's flagship 55-inch 8000 Series costs a whopping $3,999, but Tim Baxter, president of the company's consumer electronics division, says these big-ticket items still have an audience. "We are going after the two-, three-time purchaser of high-def TVs," he told TheStreet.com. "We're mindful that you have to give consumers a great value, and we think we do that." Technology research firm iSuppli says that LED TVs only account for 1% of LCD TV shipments but predicts this will grow significantly over the next few years, reaching 13.7 million units, or 42% of the total LCD TV market, by 2013. With Samsung, Sony ( SNE), LG and Sharp all pushing LED TVs in the U.S. market and Philips touting the TVs in Europe, the high-definition, mercury-free technology is slowly gaining a toe-hold. "I think that it's just starting; this is just the beginning point," said Sweta Dash, iSuppli's senior director of LCD research. "Availability of products has gone up, and that is creating a lot of interest in consumers' minds."
However, Dash warns that $4,000 TVs are unlikely to suddenly pop up in millions of U.S. homes. "A $4,000 product is going to be a very high-end product; it's not a mainstream product," she said. "The mainstream market cannot pay that high a price, particularly in this economic situation." Although Samsung's top-of-the-line TV comes with a massive price tag, the company is offering a range of LED products, priced from $1,599 for its 32-inch 6000 Series offering. With the promise of ultra high-definition pictures, Baxter is confident that customers are willing to upgrade from their current TVs. "We saw consumers stepping up, trading up, all through 2008," he said. "Expect the same thing to occur
in 2009. iSuppli's Dash says that it's all about margins for companies like Samsung and Sony. "The TV manufacturers, because of the cost of production, have very little profit margin in their mainstream products," she told TheStreet.com. "Manufacturers such as Samsung and others may have a series of products for the high end with a better profit margin and seriously high-end features." Samsung is certainly in need of a margin boost. The firm recently posted its first-ever quarterly loss, thanks largely to the downturn in the memory market and falling margins in its flat-screen business. LEDs are making their presence felt in more and more technologies, including smartphones. Samsung, for example, which is the number two to Nokia ( NOK) in global handset sales, is already touting an organic LED (OLED) smartphone with AT&T ( T).