NEW YORK – The days of new unit volume records
may have faded for the flat-panel TV category, but the
big-screen segment (40-inches and larger) stands
as perhaps the last bastion of opportunity for profit
growth from the industry’s former rainmaker.
Vendors and retailers report seeing elevated consumer
interest in big screens this year – particularly the
60-inch and larger classes – as customers come to the
realization that bigger is better when buying a TV.
What’s new is that more and more TV shoppers are
looking beyond the lowest-price-point SKUs in favor
of better-featured models with the best possible picture
At the same time, manufacturers are opening up distribution
for even the largest models to mass-merchant
and warehouse club retail channels. This includes
Walmart’s adoption of Sharp Aquos LCD TVs in the
60-, 70- and even 80-inch classes (the latter in select
locations) within the last three weeks.
For retailers and manufacturers that have suffered
from eroded profit margins on small- and midsized
TVs, the heightened demand couldn’t be better.
Industry observers reported retailers are starting to
reserve more floor real estate in their TV showrooms
for the big-screen SKUs.
In addition to generating higher turns, the segment
is also delivering significantly higher average profit
margins than commodity-sized models.
“The 60-inch and larger category is already generating 15 percent of the LCD industry dollars, so people are
devoting more time, more dollars and more attention
to large screen,” said Mark Viken, Sharp Electronics
Marketing Co. of America marketing VP.
Helping to drive interest in the segment is the fact
that more vendors have introduced 60-inch-plus
screen sizes; per-inch prices have become significantly
more affordable; and most of the biggest screen
models now incorporate popular features, including
3D and Internet connectivity for over-the-top streaming
TV market researchers are picking big-screen flat
panel as a rare growth opportunity this year.
“From 2010 to 2011 we saw an increase [in 60-inchplus
TV sales] of almost 90 percent, and in 2012 we
are looking at an increase of almost 45 percent,” said
Tamaryn Pratt, Quixel Research principal. “We expect
more 65-inch models in the market this year as well as
70 inches. In addition, many new retail outlets will be
carrying large-screen models, which will support the
Paul Gagnon, NPD’s DisplaySearch TV market
research director for North America, forecast 20 to
25 percent growth from the previous year in North
American unit shipments of 40-inch and larger flatpanel
TVs for 2012.
“Observing some of the sell-through figures, it’s apparent
that the 40-inch-plus TV market is growing and
much better than smaller sizes,” he noted.
Within the segment, Gagnon said the highest volume
levels will come from the 40- and 42-inch classes,
both of which see prices fall to around the $500 price
mark with regularity.
“But one of the most interesting sizes, and the one
garnering a lot of attention, is the new 50-inch LCD TV
class,” Gagnon said. “It is being rolled out by a number
of brands and mostly at very aggressive price points to
steal share away from plasma and to move consumers
up from 46- and 47-inch models, which sold well last
year. We are expecting the LCD TV unit volume from
50- to 54-inch to more than double in 2012 to 2 million
Quixel’s Pratt said that in addition to screen size,
more and more consumers are attracted to better-featured
products than in recent years.
“To date, we have seen de-featured or simple models
lead sales, but that will change this year,” she said.
“There will be very few [CCFL-backlit] models, and almost
all big-screen models will be connected and/or
have 3D capability.”
Brian Siegel, Sony Electronics television VP, agreed:
“For the past couple of years, consumers shopped with
an idea of buying the largest screen size for the lowest
price. However, we’ve also seen an increasing dissatisfaction
related to poor picture quality – a kind of buyer’s
remorse – from consumers buying discount brands.”
Siegel continued, “There is a technology advantage
that delivers very appreciable benefits to consumers,
and both manufacturers and retailers are beginning
to communicate that better to consumers. For Sony
and our retailers, it’s about delivering the right TV for a
customer’s needs and desires, and making consumers
long-term customers of the brand.”
Siegel said connected features take a back seat to
picture quality with most Sony customers.
“Connected features are clearly important to our
customers and connectivity becomes progressively
more important as time passes. However, connectivity
without superior picture performance usually brings a
less-than-satisfying experience,” he said, adding that
Sony is now trying to capitalize on both areas by offering
TVs with Sony’s X-Reality and X-Reality Pro chipsets
to improve picture performance for a wide range
of sources, including “lower-resolution content often
The company is also offering customers a range of
connected-entertainment sources through Sony-only
offerings, including the Video Unlimited and Music
Unlimited services offered through the Sony Entertainment
As for 3D, Pratt said most 60-inch-plus SKUs this
year will have 3D capability built in as a feature.
“In 2011, only about 25 percent of the 60-inch TV
category had the 3D feature, and that percentage was
about equal for plasma TV and LCD/LED TV,” Pratt said.
New in 2012, manufacturers LG and Samsung are
trying to stay a step ahead of Apple by releasing bigscreen
models incorporating voice and gesture-controlled
interfaces in some high-end models. If nothing
else, the feature should bring even more attention to
the category, analysts said.
Despite reports of some manufacturers scaling
back panel production as losses continue to pile up
from TV operations, Pratt said she couldn’t see any
threat of price increases on the horizon.
“Unfortunately for manufacturers, there will be very
few, if any, price increases due to increased competition
from 65-inch LED models and also value-priced
60-inch and 65-inch plasma TV,” Pratt said. “In this
case, models are getting bigger and better.”
DisplaySearch’s Gagnon said the impact of panelproduction
cutbacks and unilateral pricing policies imposed
by a few brands “will be more stable pricing on
the mid- to high-end models. The entry-level models from
the top name brands are not really governed by new pricing
policies, so they should continue to be priced competitively
to hold share against lower-tier brands.”
“Time will tell if the industry can hold the line on
pricing,” he continued, “but the low-margin situation
and our outlook for fairly stable panel pricing would
suggest limited maneuvering room on retail pricing if
everyone wants to operate profitably this year.”
Another driver of big-screen volume this year will
be a greater representation of brands in the segment.
Sharp stands as the big-screen leader, with better
than 60 percent market share, according to company
estimates, after helping to pioneer the category
through the release of products in the 60-, 70- and
80-inch screen sizes.
Sharp’s Viken said the 60-inch class has been a
strength for Sharp in the past, but “70- and 80-inch is
gaining momentum, and we think 70 is really going to
drive our business year.”
He attributed the growth in the bigger sizes to consumers
becoming more accustomed to seeing very
large-screen displays in the market, which has led
some to regret not having purchased a larger screen
size from the beginning.
“So they are returning to buy a larger model,” Viken
said. “The American consumer has the room in their
home and loves the big-screen experience.”