Press Release

HDTV Market To Finish Strong in 2012

September 13th, 2012

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During much of the first half of the year, revenue from the LCD HD television segment, which is the most widespread HDTV technology in the world, remained poor. And although some of this could be blamed on weaker than expected consumer demand and over-saturation, the primary problem for LCD manufacturers has been the rise of ultra-low cost production in places such as China, which has undercut already meager margins on LCD screens. Furthermore, falling costs on alternate technologies including LED, OLED, and 3D TVs, is also leading some consumers away. In fact, with the exceptions of Samsung and LG, which benefit from a more competitive pricing model, every other supplier, including Sharp, Toshiba, and Sony, all turned in losses in their respective LCD HDTV segments during the first half of the year. However, heading into the second half of the year, increased consumer spending and the back-to-school and holiday shopping seasons suppliers are now focusing on these higher margin new technologies.

For one, the rapidly emerging market for Internet capable "Smart TVs" is seeing increased interest among suppliers as a way to provide value-added functions. At the same time, global penetration remains low, as most of consumers continue to use their advanced TVs only for television and movie viewing. Many players in this market are now forming new alliances in order to prepare for rising consumer interest in the near-to-medium term. For example, LG Electronics and TPV Technology are expected to either form a partnership with one another or may seek out additional partners. Players may also be forming their own alliances as the Smart TV market has reportedly drawn the interest of Apple. The iPhone maker is rumored to have a smart TV in the works to be released sometime in the next year or two, and due to Apples massive influence in the market, other players fear that its interest could lead to domination in the Smart TV market as well.

Another HDTV product category expected to witness growth in the more immediate future, will be ultra-premium OLED sets. Samsung, the global HDTV OEM leader, will be the first to introduce a 55-inch OLED Smart TV (the ES9500) sometime in the second half of this year with a retail price tag of more than $9000. LG, the second largest player, will also follow with its own 55-inch set in the second half of the year. LG, however, believes that its well-positioned to surpass Samsung with its flat-screen white OLED TV technology, which it claims to be two years ahead of its competitor, as well as significantly cheaper. Meanwhile, some rival TV manufacturers are now scrambling to develop their own OLED-based HDTVs, and get these out on the market as soon as possible.

This was re-affirmed in June 2012 when Sony and Panasonic announced the signing of an agreement regarding the joint development of OLED panels and modules for TVs and other large-sized displays. The two firms are seeking to establish mass-production of the technology starting in 2013. The move was, in many ways, somewhat surprising as reports earlier this year alluded to the fact that Sony would exit the OLED TV business entirely. Also, Sony and Panasonic are competitors on the OEM front, however, the threat posed by South Korean rivals Samsung and LG have most likely caused the two Japanese players into a partnership. It is believed that although they will be late entrants to the market, Sony and Panasonic should manage to compete with Samsung and LG in the OLED space if their products are price comparable.

Databeans expects that while sales will slightly recover during 2012 as a whole, the market will really see substantial growth starting in 2013. For one, LED screens will receive a boost from newer lower-cost direct-LED backlight models. While still slightly bulkier than edge-lit LEDs, the direct-lit LED models will attract more price-conscious consumers in emerging regions with their much lower retail prices. On the opposite end of the spectrum, ultra-premium OLED and Smart TVs will attract consumers in established markets looking to upgrade. It is projected that total global semiconductor revenue for Televisions will grow from just over $12.7 billion in 2012 up to more than $14.2 billion in 2013. Over the next five years the market should grow at a healthy tick of 11 percent annually on average.

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