TV Display Sales Driving Home Theater Business

By Greg Tarr -- TWICE, 6/21/2004

NEW YORK — Virtually all segments of the consumer electronics industry are looking at the growing popularity of large-screen televisions — particularly flat-panel plasma and LCD TVs — as an opportunity to advance home theater equipment sales this year.

In fact, sales of home theater television sets and monitors — which the Consumer Electronics Association (CEA) defines as a display with a screen size of 27 inches and larger — are expected to grow in most TV display segments this year, according to industry sales figures.

Manufacturers now recognize that women are playing a critical role in the household buying decision for TV sets and home theater systems, and are tailoring their offerings accordingly. Marketing emphasis has now shifted toward home theaters built around fixed-pixel TV products — including flat-panel TVs and micro-display rear-projection products — that offer improved resolution, small footprints and thin cabinets.

At the same time, manufacturers are placing more emphasis on TV cosmetics, stressing cleaner lines with a more contemporary feel.

Although it is still a niche in the overall color television business, flat-panel displays are enjoying one of the strongest growth surges in the business.

According to CEA market research tracking U.S. factory sales to dealers, approximately 528,829 flat-panel displays have been sold year-to-date. That is up 205.1 percent from the same time a year ago. By the end of the year, combined digital LCD TV and plasma-display panels are expected to reach nearly 1.7 million units, CEA reported.

Within that figure, U.S. plasma TV sales are up 114.8 percent as of April 4 year-to-date, at 158,324 units. CEA forecasts the category to reach 549,778 by the end of the year.

Market research firm NPD Intelect said first quarter sell-through volume of flat-panel TVs 27-inches and larger was 54,733 units.

On a global basis, unit sell-in shipments of plasma displays for home theater markets were expected to reach 763,000 units by the end of the second quarter, up 152.6 percent from a year ago, according to market research firm iSupply/ Stanford Resources' Television Systems Q2 2004 Market Tracker. That is expected to rise by 970,000 units over the third and fourth quarters for a total of 1.7 million home theater plasma sales worldwide by the end of the year, iSupply/ Stanford Resources said.

Meanwhile, CEA said U.S. digital LCD TV sales were up 271.9 percent as of April 4 year-to-date, at 370,505 units. The category is projected by CEA to top 1.1 million units by the end of the year.

According to NPD Intelect, 8,448 units were sold through to consumers during the first quarter, encompassing numbers reported by member retailers only.

On a global basis, iSupply/Stanford Resources projects unit sales of LCD TVs 27-inches and larger to reach 909,000 by the end of the second quarter, up a whopping 774 percent from the first half of 2003. For the year, the firm said global factory sales of large screen LCD TVs would reach almost 2.6 million units, up 625.1 percent from a year ago.

Cognizant that most consumers are not willing to pay the extra price to have a flat-panel TV, manufacturers are developing ultra-thin rear-projection models based on micro-display devices such as LCD, DLP and LCoS. This approach offers dramatically reduced cabinet sizes, and brighter pictures than is possible with CRT-based rear projection designs.

According to the CEA, sales of micro-display rear-projection sets and monitors reached 172,047 units year-to-date, as of April 4. But with a broad range of new products and suppliers coming to market this summer and fall, that figure is expected to ramp up significantly.

NPD Intelect reported sell-through volume of 56,623 micro-display projection TV units during the first quarter, based on their reporting retail members.

Global factory shipments of micro-display rear-projection products will reach almost 565,000 units in the first half of 2004, according to iSupply/Stanford Resources estimates, and will grow to 1.5 million by the end of the year. Full-year global factory sales of micro-display rear-projection products should grow some 263 percent over 2003, iSupply/Stanford Resources said.

Growth rates were lower for digital CRT-based home theater displays.

According to CEA forecasts, U.S. factory sales of digital direct-view CRT TVs 27 inches and up were up 66.4 percent year-to-date as of April 4. That was expected to grow to almost 1.4 million units by the end of the year.

NPD reported total sales to consumers of analog and digital direct view TV, 27-inches and larger, at 1.6 million units through the first quarter, based on reporting retail members.

Rear-projection CRT set and monitor sales to dealers were up 94.5 percent to 1.05 million units in the U.S., as of April 4, CEA said. That figure is expected to grow to 2.6 million units at the end of the year.

NPD Intelect reported first quarter sales to consumers of 404,660 CRT rear projection units during the first quarter, based on reporting retail members.

On world basis, CRT rear-projection sales were expected to be down 12.2 percent in the first half at 1.9 million factory unit sales. For the year, the category is projected to decline 7.4 percent, to almost 4.3 million units.

CEA U.S. Home Theater Display Sales To Dealers
Data through April 2004 and forecast (In millions of $)

Product	Unit	Dollar	Unit	Dollar	Unit	Dollar
	YTD Apr 04		YTD Apr 03		2004 Forecast
Analog Direct view	6,274,842	$219,304,243	5,740,123	$284,134,051	18,623,683	$4,332
Digital Direct view	232,995	$202,842,240	140,052	$148,966,547	1,357,765	$1,081
CRT RPTV	1,051,415	$1,656,842,578	540,456	$798,405,657	2,622,139	$3,609
Digital Micro Display RPTV	172,047	$413,864,942	NA	NA	NF	NF
Plasma TV	158,324	$547,937,948	73,717	$350,283,980	549,778	$2,226
Digital LCD TV	370,505	$327,718,460	99,624	$113,911,922	1,129,358	$949
NF -- No current forecast ND -- No data NA -- Not available Source: CEA ©TWICE 2004

iSupply Global TV Shipments, 27-Inches And Larger

Units (000)	Q1 2003	Q2 2003	Q3 2003	Q4 2003	Q1 2004	Q2 2004	Q3 2004	Q4 2004
CRT TV	11,298	9,815	10,720	12,158	11,186	10,861	11,828	13,715
LCD TV	48	56	100	150	365	544	669	989
Plasma TV	140	162	224	358	356	407	450	520
RP - CRT	1,167	1,083	1,118	1,261	1,001	975	1,079	1,232
RP - Micro	38	61	125	184	265	300	395	521
Front Projection**	58	53	65	93	106	113	131	186
Note: Shipment numbers and forecast are for sell in i.e. OEM shipment to channels ** The front-projection numbers only include "Pure Home Theatre" units. Crossover front-projectors (business projectors sometimes used in home) are not included. Source: iSuppli/Stanford Resources Television Systems Market Tracker Q2 2004 and Projection Tracker Q2 2004 ©TWICE 2004