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NPD: Picture, Audio, Price Still Drive TV Sales

Santa Clara, Calif. — Consumers worldwide still consider picture quality, sound quality, price and ease of use to be most important to their upcoming replacement-TV purchase decisions.

According to the NPD DisplaySearch “2014 Global TV Replacement Study,” picture quality is the most important feature for consumers in mature markets making an upcoming replacement-TV purchase, indexing at 148; sound quality followed closely, with an index score of 132.

The index compiles responses rating a driver “important” or “most important.” Scores above 100 indicate relatively high importance.

While price and ease of use were ranked nearly as high as sound quality in mature markets, in emerging markets having a “good warranty or service plan” ranked higher than both of those, NPD Display Search said.

“To improve market success, TV brands need to not only focus on improving the features that resonate with consumers, but also on clearly communicating those benefits,” said Riddhi Patel, consumer insights research director for NPD DisplaySearch.

While Ultra HD (also known as 4K) relates to higher picture quality, it is not as important to consumers purchase decisions because it currently carries a significant price premium in most markets, conflicting with the desire for lower prices. “Given that picture quality is the most important driver, it would benefit brands to increase consumer awareness about how Ultra HD can improve picture quality. The same could be said for OLED as well,” Patel said.

Consumers in emerging markets are expected to drive the next round of demand, with more than 30 percent planning to purchase a TV in the next 12 months. Increasing awareness and availability of flat-panel TVs, coupled with declining prices, are the key drivers of TV replacement.

The TV-replacement cycle is similar to last year — approximately eight years in mature markets and six years in emerging markets — which can be attributed to two primary factors: First, the majority of legacy sets in household inventories have already been replaced because of ongoing replacement cycles, and second, in most countries the transition to digital broadcasts is complete and there are few compelling reasons for consumers to replace their existing TVs.

Change in the year-over-year replacement cycle has been less than 10 percent for most countries in mature markets, which indicates a slowing demand.

“With CRT TVs accounting for only about 20 percent of the household inventory in emerging markets, there are very few units left to upgrade,” Patel noted. “Add that to the fact that consumers do not see enough value in the new TV features, and we could see replacement cycles slowdown in the coming years.”