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TV Shipments Soften, Leading to Growing Concerns About Inventory, DisplaySearch Reports

Wed, 12/01/2010 - 5:25am
General Electric

TV Shipments Soften, Leading to Growing Concerns About Inventory, DisplaySearch Reports

Global TV Shipment Growth Slows to 9% Y/Y from 26% Y/Y in Q210, with Western Europe and North America Showing Some Weakness; Emerging Regions Overtake Developed Regions in LCD TV Unit Volume for First Time

Santa Clara, Calif., December 1, 2010After several quarters of mid-20% year-over-year growth, the pace of global TV shipment growth slowed to 9% Y/Y in Q310, according to the latest findings from the latest DisplaySearch Quarterly Advanced Global TV Shipment and Forecast Report. Shipments of  59.8 million was a little better than expected, but it was apparent by the end of the quarter that continued sell-through weakness in North America and softer sell-through of TVs during the World Cup in Western Europe have led to increased finished TV set inventory. Even China, which has been a very hot growth market for LCD TVs in recent years, had increased inventory ahead of the Golden Week holidays in October, although good sales during the holiday period eased the pressure.

Most TV technologies, with the exception of the shrinking CRT TV market worldwide, saw positive Y/Y growth. Plasma TV shipments were up by 35% Y/Y to more than 4.8 million units. LCD TV shipments also posted positive growth, rising 22% Y/Y to 45.7 million units. DLP rear projection TVs, which are sold only in North America, posted positive annual growth in Q310 as consumers concentrate on value during a painfully slow economic recovery. Despite this, it was the weakest quarter of annual shipment growth since Q408 when the global economic crisis significantly reduced global spending on TVs.

Consumers are clearly focusing on value right now, which is one of the reasons why plasma TV growth has been so strong this year after a 1.5% global shipment decline in 2009, noted Hisakazu Torii, Vice President of TV Research for DisplaySearch. Torii added, LCD TV panel prices remaining so steady during the first half of the year, which translated to relatively stable retail prices, and there was an increase in higher-priced LED-backlit models in the LCD TV mix. Both of those LCD TV trends mean that plasma TVs have enjoyed an increasing price advantage this year at comparable sizes. This resulted in 39% Y/Y plasma TV unit growth in North America during the first three quarters of 2010, while 40 and larger LCD TV units have risen just 16% during the same time period.

Table 1: Q310 Worldwide TV Shipments by Technology (000s)

Technology

Q3'10

Units

Q3'10

Unit Share

Q/Q

Growth

Y/Y

Growth

LCD TV

45,669

76.3%

9%

22%

PDP TV

4,838

8.1%

8%

35%

OLED TV

0.2

0.0%

-52%

11%

CRT TV

9,282

15.5%

-6%

-32%

RPTV

36

0.1%

38%

9%

Total

59,826

100%

6%

9%

Source: DisplaySearch Quarterly Advanced Global TV Shipment and Forecast Report

By region, North America returned to positive Y/Y growth after a small decline in shipments during the previous quarter, although at 3%, the increase was not strong. In Western Europe, sales growth abruptly turned negative, falling from 43% Y/Y growth in Q210 to a slight decline of 1% Y/Y in Q310, as optimistic shipments ahead of the World Cup were met with disappointing sell-through results, leading to an inventory correction in Q310. China also turned from positive to negative shipment growth, falling 2% Y/Y in Q310. Not all regions were trending negative, however, as Japans TV shipments rose 62% in Q310, a better pace of growth than in Q210 as the government--sponsored Eco Points program continued to result in strong consumer demand.

For the first time, the LCD TV unit shipment volume in emerging regions, which includes Eastern Europe, China, Asia Pacific, Latin America and Middle East and Africa, surpassed that of the traditional developed regions of North America, Japan and Western Europe. The annual growth rate in these emerging markets has been far greater due to lower household penetration and more affordable pricing. Through the first three quarters of 2010, emerging markets have grown in LCD TV shipment volume by at least twice the rate of developed regions.

LED Backlights Continued to Gain Share in LCD TV Shipments, Although Pace Slows

After more than doubling in Q210, the share of LED backlights in LCD TV shipments increased just 5 percentage points to 23% in Q310. LED-backlit LCD TVs still carry a significant premium over CCFL-backlit counterparts. Although the premium is dropping, up-selling this technology to consumers has been difficult in the current economic environment. In some regions, like North America, the LED share stopped growing in Q310, remaining at 21%. The price premium for LED-backlit LCD TV panels is falling quickly, so the retail price gap should narrow considerably in Q410.

Samsung #1 Global TV Brand, Leading in LCD and #2 in Plasma; Top Five Unchanged

Samsung was the #1 brand on a revenue basis in every region it operated in, with the exception of China where domestic brands dominate. Samsung did, however, fall to #2 in LCD TVs on a unit basis in North America where surging shipments led Vizio to #1. Samsungs global TV market share, on a revenue basis, fell about 3 percentage points in Q310 to 21.3%, mainly as a result of share growth by #5-7 brands.

LGE was the #2 brand worldwide at 14.0%, down about a point from Q210. LGE was #3 in both LCD and plasma TV revenues, but led global CRT TV revenues with almost double the revenue share of any other brand. Sony rounded out the top three brands in global flat panel TV revenues during Q310, also falling by about a percentage point to 11.3%, but posting stronger Y/Y revenue growth than either LGE or Samsung. Only Sharp had stronger annual TV revenue growth, based on the strong growth in Japan, where Sharp is #1. Panasonic was the #1 plasma TV brand, and #4 overall.

Table 2: Q310 Worldwide Flat Panel TV Brand Rankings by Revenue Share

Rank

Brand

Q2'10

Share

Q3'10

Share

Q/Q

Growth

Y/Y

Growth

1

Samsung

24.4%

21.6%

-9%

7%

2

LGE

14.1%

13.5%

-1%

25%

3

Sony

12.8%

11.8%

-6%

25%

4

Panasonic

9.0%

9.1%

4%

4%

5

Sharp

6.4%

8.0%

29%

49%

 

Other

33.4%

36.0

11%

5%

 

Total

100.0%

100.0%

3%

13%

Source: DisplaySearch Quarterly Advanced Global TV Shipment and Forecast Report

DisplaySearch TV market intelligence, including panel and TV shipments, TV shipments by region, brand, size, resolution, frame rate and backlight type for nearly 60 brands, rolling 16-quarter forecasts, TV cost/price forecasts and design wins can be found in its Quarterly Advanced Global TV Shipment and Forecast Report. For more information on this report, please contact Charles Camaroto at 1.888.436.7673 or 1.516.625.2452, e-mail contact@displaysearch.com or contact your regional DisplaySearch office in China, Japan, Korea or Taiwan for more information.

About DisplaySearch

Since 1996, DisplaySearch has been recognized as a leading global market research and consulting firm specializing in the display supply chain, as well as the emerging photovoltaic/solar cell industries. DisplaySearch provides trend information, forecasts and analyses developed by a global team of experienced analysts with extensive industry knowledge and resources. In collaboration with the NPD Group, its parent company, DisplaySearch uniquely offers a true end-to-end view of the display supply chain from materials and components to shipments of electronic devices with displays to sales of major consumer and commercial channels. For more information on DisplaySearch analysts, reports and industry events, visit us at http://www.displaysearch.com/. Read our blog athttp://www.displaysearchblog.com/ and follow us on Twitter at@DisplaySearch.

About The NPD Group, Inc.

The NPD Group is the leading provider of reliable and comprehensive consumer and retail information for a wide range of industries. Today, more than 1,800 manufacturers, retailers, and service companies rely on NPD to help them drive critical business decisions at the global, national, and local market levels. NPD helps our clients to identify new business opportunities and guide product development, marketing, sales, merchandising, and other functions. Information is available for the following industry sectors: automotive, beauty, commercial technology, consumer technology, entertainment, fashion, food and beverage, foodservice, home, office supplies, software, sports, toys, and wireless. For more information, contact us or visit http://www.npd.com/ and http://www.npdgroupblog.com/. Follow us on Twitter at @npdtech and @npdgroup.

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