Global TV shipments showed a spark of recovery in Q3’09 amid an easing global economic recession, reports DisplaySearch in its latest Quarterly Global TV Shipment and Forecast Report. Total unit volume increased on a year-over-year (Y/Y) basis for the first time since Q3’08, rising 1 percent to 54.9 million units. LCD TVs have been enjoying strong growth all year after becoming the leading technology on a unit basis, but their growth has not offset the rapid decline in shipments of CRT TVs until now. LCD TV shipments worldwide increased 38 percent Y/Y, exceeding DisplaySearch’s expectations, to reach a record 37.5 million units. Government stimulus programs in China and Japan, as well as continued high levels of price erosion, contributed to excellent unit growth in LCD TVs, with double digit Y/Y growth in every region except Eastern Europe. Based on strong Q3 shipments, DisplaySearch now expects 2009 total LCD TV shipments could reach 140M units worldwide.
Despite the robust unit growth of LCD TVs and the return to positive Y/Y growth overall, revenue growth continues to be elusive. Total TV revenues were down for the fourth straight quarter, falling 10 percent Y/Y to US$26.2 billion. For the LCD TVs segment, the spread between unit growth and revenue growth was even more dramatic, as worldwide LCD TV revenues grew just 1 percent Y/Y compared with 38 percent Y/Y unit growth.
“The dramatic difference between strong unit growth and weak revenue growth is a problem for the TV industry,” noted Paul Gagnon, Director of North America TV Research for DisplaySearch. “The strong unit demand from consumers is predicated upon attractive retail prices in the current economic environment, but manufacturers and retailers can’t keep up price declines forever, as production costs fall more slowly and new advanced features require modest to high price premiums.”
Average selling prices for LCD TVs fell 27 percent Y/Y, more than twice as much Y/Y as the overall average. This decline in average prices comes despite the fact that LCD panel prices, a key cost driver of LCD TVs, have been rising for most of 2009. The result is a compression of margin at the OEM, brand and reseller levels as all stakeholders try to keep consumer interest high by moving prices lower. In addition, consumers remain very price-sensitive, so they are settling for more modest screen sizes, causing average size growth to grind to a halt in 2009, which has a direct impact on overall average prices. Even the introduction of advanced technologies like LED backlights and networking have not been able to ease price erosion.