Competition was as intense as ever in the North American LCD TV market share race during the first quarter of 2008 as Samsung, Sony and Vizio accounted for the win, place and show positions in unit shipments, with as little as 0.3 percent between them, according to a first-quarter 2008 LCD TV market share report released by iSuppli, Wednesday.
"Following Vizio's surprise rise to leadership in the North American LCD TV market in the second and third quarters of 2007 due to its rock-bottom pricing, Samsung and Sony have struck back with their own cuts and new low-cost sets," stated Riddhi Patel, iSuppli television systems principal analyst. "The competitive battle and price cutting among these three companies has made it a struggle for other competitors, such as Sharp Corp. and Philips Electronics N.V., to keep pace."
iSuppli said the Top-3 OEMs accounted for 40 percent of unit market share in the first quarter, indicating they are starting to separate themselves from the pack. In the first quarter, 4.7 percentage points of market share separated No. 3 Vizio from No. 4 Sharp, up from 2.9 points in the fourth quarter.
"This is beginning to take a toll on the other players," Patel said. "For example, Philips has announced its exit from the U.S. market and has licensed its brand to Funai. iSuppli predicts value brands in the market soon will start to encounter immense competitive pressure from new low-priced LCD TVs from Sony and Samsung."
iSuppli attributed Samsung's success to its strategy of differentiating product in North America. Such as Samsung's introduction of new sets incorporating the company's Touch of Color (TOC) concept, which improves picture quality by blending an amber hue into the display bezel frame.
Sony's strategy in North America is focused on price, offering a line of products that are competitively priced with the value brands. Vizio also is maintaining a price-driven strategy, offering value products at value prices.
The report said Samsung dominates LCD TV sales in the 21-inch to 24-inch range. Sony leads in shipments of televisions in the 40- to 41-, 45- to 46-, and 50- to 54-inch ranges, while Vizio dominates the market in the 25- to 29-, 30- to 34-, 35- to 39-, and 47- to 49-inch segments.
As prices plunge, the pace of LCD TV sales growth in North America is starting to slow, iSuppli said.
The firm is forecasting LCD TV unit shipments in North America to rise by only 26.6 percent in 2008, reaching 27.4 million units. This will be down significantly from the 88.8 percent rise in 2007 and the 92.6 percent increase in 2006, iSuppli said.
The first quarter is typically the weakest period of the year for the LCD TV market in North America, and 2008 is no exception. Unit shipments in the first quarter amounted to 5.6 million units, down 30 percent from 7.96 million units in the fourth quarter.
"After years of explosive growth, the North American LCD TV market is undergoing a deceleration due to deteriorating economic conditions," Patel said. "Furthermore, price declines for some key television sizes, such as the popular 32-inch dimension, have stabilized, negatively impacting consumer demand growth."
However, iSuppli said that as the first half sees a slowdown, the second half is expected to see a rebound, due to the following:
- The economy will rebound. With 2008 being a presidential election year in the United States, the government will do everything in its power to minimize the impact of the recession. However, this will not come quickly enough to restore strong growth to the North American LCD TV market in 2008, and rather will pave the way for a stronger 2009.
- LCD TV price deals will start to appear near the end of the second quarter of 2008 as brands and retailers start to clear out inventory.
- Analog television broadcast shut-down deadlines are looming. Consumers will want to ensure that they have a "working" TV, propelling sales growth of LCD TVs.
- Brands will continue to push their product lines to larger sizes.
LCD TV shipments in North America will continue to rise during the coming years, expanding at a Compound Annual Growth Rate (CAGR) of 10 percent from 2008 to 2012, iSuppli predicts.