Global TV Sales Up, But Snags Seen Here

By Greg Tarr -- TWICE, 8/31/2010

Santa Clara, Calif. - Second-quarter shipments of overall TV units in North America dropped 3 percent year to year after a weak 1 percent increase in Q1 2010, according to a new global TV study released by The NPD Group's DisplaySearch Tuesday.

The report said shipments in the No. 1 ranked TV market, China, saw LCD TV shipments cool off a bit as well, with factory shipments rising 31 percent year to year after posting triple-digit growth in 2009.

This was less than had been expected for the Chinese brands, and resulted from weaker holiday sales, DisplaySearch said.

Still, the firm said overall TV shipments continued to show resilience, bouncing back from dismal 2009 levels.

Global TV unit shipments rose 26 percent year over year in Q2 2010 to 56.2 million units, a 2 percent increase from Q1 2010, according to the research firm.

TV shipments to Japan surged another 56 percent year to year, the most of any developed region. The government-sponsored Eco-Points program continued to encourage consumers to trade up to more energy-efficient models, DisplaySearch said.

Latin America was the strongest region in terms of growth, rising 70 percent year to year to a record 7.3 million TVs shipped in a single quarter.

The popularity of the World Cup telecasts was credited with helping to drive sales for the region in the period.

Similarly, shipments to Europe also increased due to anticipated World Cup excitement, but sell-through results were less than spectacular, according to the report.

A build-up of inventory, combined with a weaker euro, will likely lead to a correction in Q3 2010 in order to make way for the holiday season in Q4 2010, DisplaySearch said.

"The results for TV shipments in Q2 were definitely mixed, as not all regions benefited from external stimuli like the World Cup or digital TV transitions in regions such as Europe," noted Paul Gagnon, DisplaySearch North America TV market research director. "At the same time, many manufacturers are rapidly adopting advanced technologies like LED, 3D and Internet connectivity, all of which will serve to increase the average price. However, as consumers still seem reluctant to spend, this hard shift in mix could be contributing to slower growth in markets like North America."

As an example of the consumer demand for value, plasma TV shipment growth has been accelerating, increasing from single-digit growth in Q4 2009 to 47 percent year-to-year growth in Q2 2010. Plasma offers a greater value-per-inch than comparable LCD sets, and this gap widened in Q2 2010.

LCD TV shipments in the first half of 2010 have been below expectations, but it is still possible to have a strong second half performance, DisplaySearch believes.

Recent declines in panel prices will probably lead to low Q4 set prices, driving increases in unit demand. Even CRT had a better-than-expected result in Q2 2010, as emerging markets purchased inexpensive sets for the World Cup, according to the study.

The share of LCD TVs with LED backlighting jumped sharply in the second quarter.

Following TV manufacturers moves of spreading the use of LED backlights in their LCD TV line-ups, the share of LED-backlit LCD TVs increased from less than 8 percent in Q1 2010 to nearly 18 percent in Q2 2010.

Considering the average LED LCD TV carried an average selling price (ASP) that was more than double that of a CCFL-backlit model, the impact on revenue share for LED LCD TVs was even more pronounced.

The vast majority of these LED-backlit LCD TVs used an edge-lit configuration, to capitalize on the benefits of lower cost, slimmer profiles and lower energy consumption.

As for market share by brand, DisplaySearch found that Samsung continued to pace all global TV brands in the second quarter.

Samsung's global flat-panel TV market share increased more than two points to 24.4 percent, a new record for the brand. With the No. 1 position in LCD and a strong No. 2 position in plasma, Samsung is able to participate in all major TV market segments and compete effectively with products priced at a premium to the market average.

Samsung also had the No. 1 LED and 40-inch-plus TV market share.

LGE was the No. 2 brand worldwide at 14.1 percent, unchanged from Q1, with share growth in plasma TV helping to offset some decline in LCD share. Like Samsung, LGE participates in all of the major TV categories, including LCD, plasma and CRT.

DisplaySearch noted, "LGE can address all market segments, and has a strong share position in emerging markets."

Sony rounded out the top three brands in global flat-panel TV revenue during Q2 2010, rising to 12.8 percent on the strongest quarter-to-quarter growth of the top five global brands.

Sony also reclaimed the No. 2 revenue share position in global LCD TV sales, overtaking LGE for the first time in over a year.