A the midway mark in the year, a number of television manufacturers polled by TWICE are looking for banner sales in 2005 for most display categories.
Manufacturers said sales over the first half of 2005 were on target with earlier growth projections and appear to be gaining significant momentum for the stretch run in the back half of the year.
Key categories this year are flat-panel television, both LCD and plasma models; microdisplay-based rear-projection models; widescreen, digital-capable direct-view CRT TVs; and lower-priced front projectors.
Declining will be more analog-oriented, direct-view CRT TVs, which will feel the added burden of a phased-in government-imposed digital tuner mandate in the 25-inch to 35-inch screen sizes, some manufacturers said. Also in decline are CRT-based rear-projection HDTV sets and monitors, which are being squeezed by ever-declining prices on their microdisplay-based competitors.
So far this year, flat-panel TVs have seen significant sales growth, sparked by continuous price cuts ranging as high as 40 percent in some areas.
Bob Perry, LG Electronics' sales VP, said that “in every case where analysis is possible, consumers prefer flat-panel over everything else. If the prices get close and the screen sizes are reasonable, they move to flat panel.”
This year, direct-view LCD TV sales are booming in the 37W-inch and under screen sizes, and many are calling for purchasing to intensify in the second half as prices compress further.
“Everybody that had a name someplace has now put it on an LCD,” said Stan Glasgow, Sony's consumer sales president, who said that Sony's S Series LCD TVs this year will be priced to compete with the new competition.
“In LCD over the first half, we called for an industry size of 3.7 million units,” said Bruce Tripido, Sharp's display device product marketing director. “Based on the seasonally adjusted sell-in numbers, the industry is tracking at or above that rate. We are expecting that the back half of the year is going to be phenomenal. The only thing that can stop us is supply.”
Tripido said while supply has held up well, so far, “We need more. We are over performing the estimates we called for six months ago.”
According to Quixel Market Research, LCD-TV sales grew 140 percent to 1.3 million units, from the first quarter of 2004 to the first quarter of 2005, and are growing faster than plasma TVs, at a 129 percent rate, while the entire advanced display TV market is growing at a 165 percent rate. Market research firm iSuppli forecasts North American LCD TV sales to reach 5.7 million units by the end of the year.
Despite the many new players in the market, Scott Levitan, Philips' flat TV/home entertainment networks VP, said “there is no sign of a glut in product supply at the moment. If you look at the evolution of consumer pricing, flat panel becomes more and more accessible, and that is really helping to continue to drive the market.”
So far, the battle between LCD and plasma display technologies has been averted by the higher cost to manufacture large-screen LCD products.
“Plasma will continue to represent the bulk of sales in the 40W-inch and larger screen sizes for the foreseeable future, said Perry. “Below 40W inches, the vast majority of the business will be LCD.
“It's not about whether LCD or PDP is better,” Perry continued, “it's about what space does each technology occupy and how big will those markets be in terms of taking share from other products.”
Perry pointed to the 37W-inch screen size — where plasma is a weak competitor to LCD — as an area to watch this fall.
“We expect to see some fairly dramatic price points in 37W-inch LCD as we get into the fall,” he said.
A number of manufacturers this year will bring out LCD TVs in the 42W-inch screen size, which is a stronghold for plasma. But the advantage will stay with plasma, which will be priced significantly lower than similarly sized LCDs.
“Over time that may change, but there is a lot more room in plasma over the long term to become even more cost effective, and while LCD in the smaller sizes will become very, very cost competitive in the next year or so, it is unlikely that in the next two years 42W-inch LCD will come close to 42W-inch plasma,” said Perry.
“In like-for-like product, we see the price gap between LCD and PDP narrowing [to $600 in Philips' 42W-inch models], both in the short term and the medium term,” said Philips' Levitan.
Toshiba's marketing VP Scott Ramirez also sees little conflict between LCD and plasma technologies this year, but next year he predicted the 42W-inch screen size would heat up as a 42W-inch HD plasma set sells for about $2,411, compared with a 42W-inch 1,080p LCD-TV model at about $2,740.
Meanwhile, microdisplay rear-projection TV (MD-RPTV) represents another important growth area, manufacturers said.
According to Quixel Market Research, MD-RPTV sales increased 72 percent to 366,921 units between the first quarter of 2004 and the first quarter of 2005. And iSuppli has forecast full-year sales of almost 2 million MD-RPTV sets in 2005, almost double the 2004 results.
“We see microdisplay being a format for people who want a large-screen TV,” said Glasgow. “Plasma is very expensive and hard to do in high definition. LCD is very expensive to do in a large size. We think microdisplay will continue for many years, and we think our proprietary SXRD [LCoS] is a unique technology that will help drive that.”
Frank DeMartin, Mitsubishi's marketing VP, agreed that MD-RPTV sales will see healthy growth in 2005.
“Both microdisplay and flat-panel sales are going to rise this year,” he said. “You will see some impact for flat-panel price declines on microdisplay sales, especially in the smaller screen sizes, 52W-inches and below. But if you are looking for performance and screen size 1,080p DLP [microdisplay] is pretty hard to beat.”
Meanwhile, rear-projection sets based on CRT technology are expected to sell just over 1 million units in 2005, down from 1.7 million units in 2004, according to iSuppli market research.
Toshiba's Ramirez said analog direct-view CRT televisions sales will decline by 11.5 percent this year. Sales of 4:3 digital direct-view CRT are declining at a 31.8 percent pace, so far, he said. But widescreen digital direct-view CRT sales will grow by about 100 percent to 1.2 million units in 2005.
In total, direct-view CRT sales will account for about 19 million units in 2005, according to Ramirez.
Although some manufacturers, including LG Electronics are developing slim CRT-TV designs, “anybody looking for anything better than commodity direct-view models [35-inches and below] is probably going to go to LCD,” said Ramirez.
Perry said the 50 percent DTV tuner mandate, which impacts 25-inch to 35-inch sets on July 1, will present “a real test to see whether certain manufacturers follow the rules.”
“Clearly, if everyone follows the FCC rules, we are going to see a decline in 25- to 35-inch CRT sales, because those consumers, when faced with paying the extra cost for a digital tuner, will probably just bite the bullet and pay a few dollars more for LCD,” said Perry.
North America TV Shipments by Technology