By Lisa Johnston
New products on display at the American International Toy Fair, held in N
Santa Clara, Calif. — Predicted lower demand for LCD TVs in 2013 has most LCD panel manufacturers scaling down their business strategies for the year, according to the newly released NPD DisplaySearch “Quarterly LCD TV Value Chain Report.”
The market research report said panel makers are trying to avoid an oversupply of LCD TV panels, particularly in smaller screen sizes.
“This involves a drastic change in business models, which includes developing strategic alliances, making capacity allocation improvements, and expanding product portfolios to include a larger variety of panel sizes,” NPD DisplaySearch said.
LCD TV panel manufacturers are looking to improve profitability by selling more large screen sizes — to increase total area shipped in the process — even as unit shipments decrease.
“Consumers are focused on TV prices, while brands have been focused on TV features. This disconnect has resulted in reduced demand and profits for TV supply-chain participants in 2012,” said Deborah Yang, NPD DisplaySearch research director. “A misalignment in panel size portfolios between buyers and sellers could result in supply constraints. Panel makers and TV brands are trying to strengthen their business portfolios and enhance their bargaining power with supply-chain participants in order to improve profitability and gain a competitive edge.”
At the same time, some TV brands — including Samsung, LG and most of the Chinese TV labels — have more aggressive marketing programs, leading DisplaySearch to predict 4 percent year-over-year growth in LCD TV panel shipments for 2013 and 11 percent year-over-year growth in TV shipments planned by surveyed TV brands.
DisplaySearch pointed out that Samsung and LG, for example, are working with Sharp to increase panel supply in 2013, mostly for 32-inch panels.
“Some TV brands’ 2013 shipment plans reflect their strategy to set higher targets and secure sufficient panel supply, but they may also be too aggressive,” said Yang. “The TV supply chain is evolving, with Taiwanese panel makers leading the development of new panel sizes and ties with TV brands. Meanwhile, panel and set makers are adopting new business models around open cell and backlight-module-systems (BMS) assembly. Other TV manufacturers may be forced to follow suit — changing the TV value chain over the long term.”
The report is available now at the NPD DisplaySearch website.
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