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TV sales slide


Published: 16 March, 2012


People in the West have largely stopped increasing their spend on buying new TV technology says US research company NPD DisplaySearch, saying the a fall in TV shipments in 2011 was a surprise and the first fall for 6 years.

It was more than those 6 years ago in 2004 that Faultline examined the big, flat TV screen phenomenon, which at the time could bleed up to $10,000 out of your entertainment budget. That Christmas about 3 million such devices sold.

We then saw a huge amount of factory space being moved over to LCD and Plasma screens and predicted that LCD TVs would be a 20 million a year business within a few years and predicted that prices would fall to under $1,000 at retail. Even we under-predicted and the rest, as they say, is history. Today a vast majority of devices are LCD screens, and all the other segments are dead or dying, even the heralded replacement technology for LCD, OLED, which has yet to become sufficiently economic to take off, lost ground last year.

TV shipments fell in 2011 for the first time since 2004, falling just 0.3% to 248 million units, but now 205 million of them are LCD screens, and that represents a 7% growth in LCD over last year, but even that is a substantial slowdown from the double digit growth in previous years. Plasma TV shipments declined 7% to just 17 million and CRT shipments fell off a cliff again, down another 34%.

In our view TVs are bought in roughly 7 year cycles, with about one TV in 7 being replaced each year, with concentrations of sales happening around the introduction of new technologies, and a slight thinning out of sales when there is nothing new to buy in a TV set. Connected TVs are obviously one spur to purchasing a TV, but perhaps we are seeing a backlash against the optimistically early introduction of 3D sets, which are now rotting on the shelves.

"The causes of slow demand in 2011 were complex, and although LCD TV showed growth, results were well below industry expectations." noted Paul Gagnon, NPD DisplaySearch Director of North America TV Research. Gagnon added, "The low level of shipments were partially caused by excessive inventory levels early in 2011 for the US and European markets, as well as a sharp drop in demand in Japan following the end of the government sponsored Eco-Points program that caused a surge in replacement activity during 2009-2010."

The truth is that if BRIC countries were not soaking up new devices into their suddenly rich middle classes, this would be a fall of immense proportions and the industry would be almost out on its feet. Economic uncertainty is certainly part of the equation.

Q4 quarter shipments were down 4% overall to 74.2 million units, with LCD TV up 1%, Plasma TV off 8%, and CRTs crashing 43% with much of the decline focused in Japan and Western Europe, where economic uncertainty is probably higher. LCD devices are now 86.5% of global TV shipments and the larger screen sizes are doing better here with 40 inch and above up 20% and lower sizes falling.

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