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Flat-Panel TVs Begin To Dominate U.S. Market

Combined flat-panel TV sales accounted for nearly half of all televisions sold in the U.S. in 2006, with both LCD and plasma building share in larger screen sizes, according to a DisplaySearch U.S. flat-panel TV market overview.

Paul Gagnon, DisplaySearch North American TV market research director, said at the recent DisplaySearch Flat-Panel Conference that flat-panel TV sales were stimulated by “lower price points that peaked U.S. consumers’ interest” in 2006.

United States unit sales rose to more than 17 million, up 136 percent over 2005, while revenues nearly doubled due to price declines to over $21 billion, up 95 percent over 2005.

By technology, Gagnon said LCD TVs “have a dominant unit share position with four out of five flat-panel TVs shipped in North America being LCD during 2006.” This was helped by a broad range of screen sizes starting at less than 15 inches and rising to more than 60 inches.

Plasma display panel (PDP) unit sales were restricted to 37W inches and larger, he observed. “On a revenue basis, LCD TVs have also grown to nearly two-thirds of U.S. revenues. That was enabled by a progression to larger screen sizes and higher resolution levels, including 1,080p.”

On a revenue basis, 50W-inch plasma approached nearly half of all PDP sell-in dollars in 2006. That’s up 20 percent in share from 2004 through 2006, Gagnon said. In LCD, 30W inches to 39W inches represented the largest revenue category for the second year in a row.

On a revenue share basis, Sony moved to the No. 1 position in LCD in 2006, overtaking Sharp with a 19 percent revenue share, according to DisplaySearch. Sony expanded the BRAVIA line toward the second half of the year by introducing some lower-priced 1,080p series. That really resonated with consumers and grew their share toward the second half of the year. Samsung had the No. 2 share, while Sharp fell to No. 3, Gagnon said.

In PDP, Panasonic continued to have a dominant share with more than 30 percent share in 2006, nearly equal but slightly higher than 2005, he said. Samsung over took LG to be No. 2 in PDP revenues in North America.

“In combined flat-panel share, the No. 2 position for Samsung for both LCD and PDP translated into the No. 1 position in overall flat-panel TV revenue share in 2006,” said Gagnon. “Panasonic ended up being the No. 1 PDP brand, and Sony was the No. 1 LCD brand, and they ended up being No. 2 and No. 3, respectively, on total combined flat-panel share in 2006.”

According to The NPD Group’s latest sell-through numbers for January 2006 through January 2007, the blended average price for PDPs fell nearly 35 percent year-over-year, Gagnon said; however, LCD fell just less than 2 percent for the same period.

“So on the surface it appears that pricing for PDP is dropping faster than LCD — however, if we take a look at specific screen sizes we see really extreme price declines in individual sizes and resolutions,” said Gagnon. “The biggest price drops came in 46W-, 42W- and 37W-inch for LCD and in 42W- and 50W-inch for PDP. That was as much as 55 percent year-over-year from January 2006 to January 2007.”

Pricing for 1,080p models was more stable, particularly toward the second half of the year.

“Retailers looked to 1,080p to support that margin loss from the door-buster specials in 720p,” he said.

According to Gagnon, 1,080p grew rapidly towards the second half of 2006 as Sony and Sharp entered with more affordable models. In the 30W-inch-plus market LCD revenue share grew as much as 35 percent.

Pioneer launched the first 1,080p plasma in mid-summer at 50W inches, but a very high price point at $6,000-plus has prevented significant consumer adoption, he said. “That will change in 2007 as 1,080p offerings from several brands, including Panasonic and Samsung, come into the marketplace,” Gagnon added.

On a share basis, flat-panel TVs represent nearly $7 out of $10 revenue dollars in North America on a sell-in basis, up from 32 percent in 2004.

“This is a very rapid shift in technology over just a few years,” he observed.

“Over the first five weeks of sell-through in 2007, we’ve seen kind of a slow start. The growth rate over that period in 2007 is significantly lower than it was in 2005 and 2006,” said Gagnon. “The reason for this is due to the fact that there was a great deal of attention paid to flat-panel TVs as the hot technology over the 2006 holiday season. So this may have pulled some of the demand out of January into November and December of 2006.”

Consumers may have decided to make their big screen purchase for the Super Bowl at Christmas time, instead, he said, due to particularly good prices at the 50W-inch-plus sizes.