Global TV market feels the pinch

The company’s ‘Quarterly Advanced Global TV Shipment and Forecast Report’ said global TV shipments struggled in the first quarter of the year as the supply chain digested excess inventory but still managed to grow by one per cent. Global TV shipments were soft in Q1’11 as the worldwide TV supply chain digested excess inventory. However, the second quarter saw the growth turn negative, with worldwide decline of one per cent. This represented a fall of more than six per cent year on year in developed regions, which more than offset three per cent growth in emerging markets.

Hisakazu Torii, vice president of TV Research at DisplaySearch, said: “Q2’10 was a very strong shipment growth period due to greater price erosion and more confident consumers, so the comparison of this year’s shipments to a year ago is tough, especially considering the surge of shipments in early 2010 due to anticipated demand related to the World Cup Soccer tournament.

“Due to weakening macro-economic conditions, similar to what happened during the global financial crisis of 2008-2009, the TV industry is becoming somewhat pessimistic and reducing inventory, especially in North America and Western Europe.”

LCD TV shipments worldwide grew at least 20% each quarter in 2010, but so far have only risen 9% year on year in the first quarter of 2011 and six per cent year on year in the second quarter. The slowing growth has impacted both developed and emerging markets, with LCD TV units falling five per cent and rising 19% respectively, both well below the rate of growth a year earlier. LED share increased from 18% of LCD TV shipments in the second quarter of 2010 to more than 43% in the second quarter of 2011 but still carries a 74% average premium across all sizes However, this is down from a 120%+ premium a year ago. Critical LED backlight cost breakthroughs have been slow to materialize.

Plasma TV shipments had shown surging growth in 2010, increasing 30% year on year after negative growth in 2009. The boost in growth had a lot to do with market pricing advantages against LCD for similar sizes and consumers who continued to focus on price. LCD TV prices started to narrow the gap this year, and the premium for a 42” class CCFL LCD narrowed from 13% in the second quarter of 2010 to less than one per cent in the second quarter of 2011 over plasma, which is having an impact. Plasma TV shipments fell six per cent in the second quarter of 2011 after double digit growth throughout 2010.

By region, China was still number one by a small margin over North America, each representing about 17% of global TV shipments. China had stronger growth, rising 10% year on year compared to a 6% decline in North America. The Asia Pacific region grew to number three for the first time, surpassing Western Europe, where retail inventory remains a problem. Despite concerns about weak demand following the Great Japan Earthquake, shipments of TVs in Japan surged 40% as consumers replaced older TVs with newer digital tuner equipped models ahead of the July 24 analog broadcast cutoff.

As TV brands and retailers continue to push for the transition to LED backlights in LCD TVs, due to both premium prices and better energy consumption, the growth in shipment share continues to rise, reaching 43% in the second quarter of 2011. Ninety-eight per cent of LED-backlit LCD TV shipments were edge-lit models due to slimmer form factor, lower power consumption and lower cost. Japan and Western Europe have already surpassed 50% of LCD TV shipments as LED and China is nearly at 50%. Most other regions, including North America, have around 20-35% of LCD TV shipments as LED.

3D enjoyed a sizeable increase in market share during the second quarter of 2011, rising from four per cent of shipments in the first quarter to almost nine per cent in Q2. The growth in share signifies that manufacturers have greatly expanded the number of 3D-capable models and reduced the premium associated with the technology, giving consumers more choice. There have also been a wider range of new sizes, down to 32”, and in the case of LCD, lower frame rate models with 3D available. DisplaySearch estimates that about a quarter of 3D TV shipments use passive 3D technology and the remainder use active shutter glass technology.

Samsung’s global flat panel TV revenue share was up slightly in the second quarter of 2011 to 22.6%, a substantial lead over number two brand LGE.

Samsung was the number one brand on a revenue basis in almost every region, with the exception of Japan and China where domestic brands dominate, even surpassing LGE in Asia Pacific markets. Samsung was also number one in LCD revenues and number two in both plasma and CRT TV revenues. Samsung also regained the number one LCD TV unit share position in the second quarter of 2011 from Vizio for the first time in more than a year.

LGE was the second brand worldwide at 14.4%, nearly unchanged from the previous quarter. In terms of revenues, LGE was number three in LCD TV and plasma TV, but led in CRT TV with more than double the revenue share of any other brand. Sony remained the third brand in global flat panel TV revenues during the second quarter of 2011, with a small increase in share. Sharp and Panasonic rounded out the top five, trading share positions again compared to last quarter, mainly through the addition of Sanyo to Panasonic’s global TV business.

Samsung was the number one global 3D TV brand overall, accounting for all technologies, with 35% of revenues. Within the 3D LCD TV category, Samsung overtook Sony for the top revenue share at 35% while Panasonic reclaimed the 3D plasma TV revenue share lead at 48%.