LCD TV vendors in China are expected to resort to aggressive pricing to boost demand in the second half of 2010 in order to reach their shipment goals for the year following worse-than-expected sales in the first half, according to market sources.

Vendors expect overall LCD TV sales in China in 2010 will fall short of the previously estimated 35 million units, as sales in January-May reached only 11-12 million, the sources said.

First-tier vendors such as Sharp and Samsung Electronics reduced their LCD TV prices by 15-20% during the Labor Day holiday earlier in May, while local competitors dropped their prices by about 20%, the sources noted.

Prices for 32-inch LCD TVs have dropped to about 2,699 yuan (US$395.11) from about 3,300 yuan at the end of 2009. Prices for 46-inch models have dropped to about 3,600 yuan, close to the prices for 32-inch models seen at the end of 2009, the sources said.

Vendors' active promotion of LED-backlit LCD TVs is accelerating the exit of CCFL models from the market, the sources added.

China-based TV vendor Konka noted that although sales grew about 60% in first-quarter 2010, gross margin for flat-panel TV dropped significantly on year.

Hisense's revenues in the first quarter increased about 50%, but gross margin dropped 2.2 percentage points on year to 16.8%.