San Diego — TV market research firm DisplaySearch said global economic difficulties, the transition to full DTV broadcasting in the United States in early 2009, and continued strong consumer demand for flat-panel TVs should combine to keep North American DTV sales ahead of forecasts in 2008 without stressing supply levels.
Speaking at DisplaySearch’s TV Supply Chain Conference, here Thursday, Paul Gagnon, DisplaySearch North American TV research director, said first-quarter TV shipment results were solid, despite some preliminary indications of a market slowdown.
Gagnon said the global growth rate of flat-panel sales decelerated from the fourth quarter of 2007 to the first quarter of 2008, which was counter to normal seasonal trends, indicating the impact of the economic downturn.
Still, he said, growth was positive and 2007 showed unusually strong market acceleration.
Revenue growth, which helped the market garner $100 billion worldwide in 2007, was more dramatic, and even in the first quarter of 2008 remained strong, rising 8 percent, Gagnon said. He attributed that to high average selling prices as consumers purchase larger and larger screen sizes.
As sizes have increased, the rate of growth has slowly stabilized. Gagnon attributed that to the high degree of flat-panel penetration in developed markets including Japan, North America and Western Europe.
Still, he said flat-panel TVs remain highly sought after, with LCD posting the strong growth levels.
By technology, he said LCD TVs are leading the charge into larger and larger screen sizes, leaving plasma makers struggling to keep up despite the near collapse of rear-projection TV.
In the fourth quarter of 2007 LCDs overtook CRTs on a unit-volume basis for the first time, worldwide. However, in the first quarter of 2008 CRTs came back by 2 percentage points in market share, he said, after seeing higher-than-expected demand in North America and increased activity in emerging markets.
On a year-to-year basis, rear-projection TV sales have shown an accelerated rate of decline, following the exit announcements by several major manufacturers.
Plasma share, he said, showed higher growth rates worldwide over the past two quarters than in the previous two years. Gagnon said developing markets helped to drive plasma growth behind strong adoption rates of 32-inch sets.
However, LCD is making advances into larger and larger screen sizes, he said, and the 50- to 54-inch screen sizes will be a battleground in 2008 that plasma brands must fight to keep.
Sales are also accelerating in smaller screen sizes, and some TV manufacturers have begun using panels originally intended for PC monitors in smaller screen LCD TVs, noted David Barnes, DisplaySearch strategic analysis VP.
Monitor panel designs supplied 56.4 percent of smaller-than-26-inch LCD TV sets and 10.1 percent of all LCD TV sets in the first quarter of 2008, Barnes said. The area share of monitor panel designs was less: 55.2 percent and 3.5 percent, respectively. The area share of 26-inch and larger panels was 93.7 percent in first quarter of 2008.
On a global revenue basis, LCD far surpasses all other display technologies, accumulating a 70 percent share of the market for the first time in the first quarter of 2008, according to Gagnon.
Gagnon said 2008 will be an important year of change.
Gagnon predicted that LCD panel suppliers, flush with profits, will rapidly expand capacity in 2009 and beyond, which will drive prices lower and boost demand.
Barnes said DisplaySearch’s TFT capacity forecast for fourth quarter of 2012 is two times the capacity of the fourth quarter 2007. Barnes predicted there will be more large TV panels available than people assume.
Barnes said that based on the trend for cutting TV panels out of TFT substrates, suppliers could ship 40 percent more TV panels than most people expect in 2012. He forecast suppliers will use the capacity and clear it through the market by adjusting prices, as they always do.
Gagnon, meanwhile, said that several brands are currently using aggressive tactics to hit market share growth targets. This is fueling a price battle that could leave some brands unable to compete.
Gagnon said, “Consumers appear poised to shift purchasing habits for flat-panel TV’s, looking at smaller sizes and second and third purchases.”
