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iSuppli: U.S. TV Shipments Will Decline

3/27/2012 02:43:01 PM Eastern
El Segundo, Calif. - U.S. flat-panel TV shipments are projected to dip for the first time on an annual basis this year, ending an unbroken string of growth since the market began, according to a new report from IHS iSuppli.

Shipments in 2012 of flat-panel TVs into the American market are forecast to decline to 37.1 million units, down 5 percent from 39.1 million units in 2011, the firm's U.S. TV Market Tracker reported. This follows a 1 percent growth last year from 38.6 million units in 2010.

Shipments of LCD TVs, plasma TVs and rear-projection TVs are projected to continue to weaken for the next three years, until at least 2015.

"The U.S. flat-panel television market has never declined on an annual basis, even at the height of the recession in 2008 and 2009," stated Lisa Hatamiya, IHS TV research analyst. "The decline starting this year suggests that demand may have crested for the mature U.S. TV market. Sales in the United States now are being driven by consumers who are replacing their older flat-panel sets with new models boasting more advanced features. This contrasts with developing regions of the world where vibrant, untapped markets remain for buyers making their first-ever purchase of flat-panel sets."

 The declines will result from a long-term maturation of the U.S. television market, in addition to "specific supply and dynamic developments that occurred in 2011," iSuppli said.

The firm also blamed television brands being too optimistic last year in believing that consumers were finally ready to buy new TVs as they increased first quarter 2011 shipments. A negative chain reaction that lasted through the year then ensued, iSuppli said, with sets being very aggressively priced toward the third and fourth quarters to make up for the first half.

The price cuts dug deeper into already weak profits across the board for most vendors.

As a result, brands will be very cautious in 2012, iSuppli predicted.

"Manufacturers will attempt to control new shipments into the U.S. market, so that prices remain steady and won't drive as much demand as last year," iSuppli said. "The attempt to rein in pricing could also prove dicey, possibly risking the ire of a purchasing public used to discounting or a pattern of gradually lower prices. The overall effect will serve to inhibit shipments this year."

Due to the supply declines, the industry should become more profitable, with less discounting bringing in more revenue, according to the report.

 LCD TVs with LED backlighting should become the dominant display technology in the United States for the first time, iSuppli said. U.S. shipments of LED-backlit sets will reach 23.7 million units, compared with 8.7 million for CCFL models.

Last year, CCFL claimed higher shipment numbers, at 18.8 million units, against 14.5 million for LED sets, iSuppli reported.

LED-backlit sets are expected to see rapid double-digit growth in the upcoming years as brands focus on marketing this feature and making LED-based models standard in their lineup. The technology will proliferate in small- to medium-sized TV panels measuring 40 inches and smaller.

While U.S. flat-panel TV shipments are projected to move down, manufacturers will continue to drive sales of TVs with increasingly more advanced features, iSuppli believes.

In other trends outlined in the study, LCD TV sales will continue to transition to larger sizes. There will also be higher refresh rates (from 120Hz refresh rates to 240Hz and 480Hz), FullHD 1080p resolution, embedded Internet-connectivity, and increasing use of 3D features based on passive 3D glasses technology.
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