During last year’s holiday season, 32-inch LCD HDTVs flooded the market, drove prices down, and spelled trouble for some retailers like Circuit City. This year, according to the Wall Street Journal [Subscription Required] on Tuesday, manufacturers and retailers are focusing on larger 40-inch plus TVs to avoid repeating that scenario.

Each vendor is making the larger TVs in the 40 to 52 inch range a larger percentage of their lineup. Larger TVs mean better margins. Also, larger screens bring out the technical advantages of the major vendors’ display technology and help differentiate them from makers of less expensive systems.

"If more [consumers] step up to larger screen sizes, it’s going to generate some extra revenue," said Tim Alessi, LG’s product development director for consumer electronics.

Of course, as the sales of the larger screens go up, the component costs will come down. It’s a never ending cycle that’s good for the consumers. So far.

Manufacturers are also paying more attention to the ease of handling for the larger TVs. "The widths of the Sharp TVs were reduced 25% and their weight cut by 20% from previous models -- without reducing the screen sizes -- to make it easier for shoppers to get the TVs home and mounted. Sharp, which launched an ad campaign about its TVs this month, says its new 42-inch TV can now fit in the same space as a traditional 40-inch flat panel TV because of the smaller frames," Christopher Lawton wrote for the WSJ.

In addition, the manufacturers are well aware of the HDTV buying adage. Almost no one complains about the screen they bought being too big, but many regret buying one that’s too small. "We’ve done quite a bit of research over the last couple of years trying to understand [screen size, fast action]," Randy Waynick, an executive with Sony, said. "Almost everybody wants a bigger set."

Note: iPO has published the first three of a six-part holiday buying guide for those planning to migrate to HDTV this Christmas. Here are the articles published to date:

The Fireside Guide: Moving to High Definition, Introduction

The Fireside Guide: Moving to High Definition, Display Selection

The Fireside Guide: Moving to High Definition, Audio Selection