El Segundo, Calif. — Despite generally more frugal TV shoppers during the economic slump, North American LCD TV shipments rose 10.5 percent in the first quarter of 2009 to 6.3 million units, compared with the same period a year ago, according to a new study from market research firm iSuppli.
At the same time, the tougher economy forced more consumers to seek out LCD TV bargains in the period, resulting in value-focused supplier Vizio seizing the top market share position in the category from higher-priced former leaders Samsung and Sony, according to the study.
However, with its Q1 LCD and plasma TV shipments combined, Samsung managed to lead all manufacturers in over all flat-panel TV shipments with 20.5 percent of the market, followed by Vizio at 19.8 percent and Sony at 14.6 percent, Patel told TWICE.
While up from the year-ago period, sales of LCD TVs in the quarter were down 23.2 percent from the 8.1 million units sold in the fourth quarter of 2008, but iSuppli pointed out that the decline “follows the normal seasonal pattern of shipments peaking in the fourth-quarter holiday season and falling to the low point of the year in the first quarter.”
iSuppli concluded from Vizio’s accomplishments in the period that rather than stopping their purchases of LCD TVs during the economic storm, consumers focused instead on buying lower-priced sets.
Some of the strong market activity could also be traced to publicity surrounding the controversial end of analog broadcasting, which is now slated to take place June 12.
“With LCD TV sellers in the first quarter maintaining their promotions from the holiday season, and with prices declining, television sales managed to grow compared to the same period a year earlier,” Riddhi Patel, iSuppli television systems principal analyst, said in a statement on the report.
Vizio’s share of North American LCD TV unit shipments rose to 21.6 percent in the first quarter, up 7.8 percentage points from 13.8 percent in the fourth quarter of 2008, passing former category leaders Samsung and Sony in North American sales, iSuppli said
“Due to its aggressive pricing, Vizio for some time has maintained its position as North America’s top-selling LCD TV value brand,” said Patel. “However, since the onset of the economic downturn, Vizio’s share has risen dramatically. With budgets becoming increasingly tight, consumers are finding the company’s inexpensive sets more alluring.”
iSuppli pointed to Vizio’s lowest average selling price (ASP) for a 42-inch CCFL-backlit, 60Hz refresh rate, FullHD 1080p LCD TV at $850 as an example of the price positioning that pushed the company over the top.
iSuppli said comparably configured 40-inch LCD models from Samsung and Sony had ASPs of $1,000 and $1,090, respectively, in the period.
When comparing 120Hz models at the 40/42-inch size, the price differential between Vizio and Samsung and Sony was $400, with the Vizio set priced at about $1,000, iSuppli said.
After first taking the lead in the North American market in the second quarter of 2007, Vizio’s share of LCD TV shipments dwindled to 8.7 percent in the second quarter of 2008. However, by the first quarter of 2009, the company’s market share had risen by two and half times the level of the low in the second quarter of 2008.
While Vizio has maintained its low pricing, it has managed to add newer features to its LCD TVs, such as 120Hz, making them more competitive with those from premium brands like Samsung and Sony.
Patel said Vizio also benefited from its relationships with high-powered discount retail channels, including Wal-Mart.
iSuppli said Vizio posted the largest increase in market share and shipments among the Top-5 North American LCD TV brands.
The combined market share of the smaller players, accounted in the “others” category in the attached market-share table, saw their portion of shipments plunge to 21.9 percent in the first quarter, a significant drop from 29.4 percent in the fourth quarter of 2008.
“Smaller brands saw their share of shipments decline so rapidly because of increased competition from the premium brands in terms of pricing and availability of 32-inch and smaller sizes,” Patel said. “Premium brands priced some of their product lines very competitively with their value alternatives, compelling consumers to go for names that they recognize.”
iSuppli Table: Top-6 Flat-Panel TV Brands in North America in the First Quarter of 2009 (Ranking by Unit Shipments)
Source: iSuppli, May 2009