The implementation of new flat-panel TV energy efficiency standards in China on December 1, 2010 will stimulate more price-cut promotion on products that do not meet the standard, while LED-backlit TV prices are expected to drop by CNY500-5,000 (US$74.99-749.9), further helping to push LED-backlit models to the mainstream.

China's TV vendors noted that the standards were announced at the end of June, and after five months of adjustment, vendors should have no problem reaching the lowest threshold. However, competition between first-tier vendors will focus on higher efficiency products, which also means a higher threshold in terms of cost and technology, and small- to medium-size players will not have advantage from their low prices.

Vendors in the China market were actively cleaning out their inventories before the implementation of the new standards. First-tier vendors focused on 46- and 47-inch models, while local vendors focused on 32-, 40- and 42-inch models. Local brands have seen prices of their 32-inch LED-backlit TVs drop below CNY2,500, and prices of popular LED-backlit models have dropped by around 20%. Prices for 40- and 42-inch models have dropped below CNY5,000, and some models from China vendors have dropped to as low as CNY4,000.

There are three levels of efficiency in the new standards: level one for most efficient products; level two for products that meet the lowest requirements for being labeled energy-efficiency products; and level three for products meeting the minimum requirements for being allowed on the market.

Only about 2.4% of the existing products on the market match level-one efficiency, 10.8% for level two and 72.3% for level three.