Santa Clara, CA--Global TV shipments were soft in Q1'11 as the worldwide TV supply chain digested excess inventory, but growth was still up one percent Y/Y. In Q2'11, TV shipment growth turned negative, declining one percent Y/Y and falling more than six percent Y/Y in developed regions, which more than offset three percent growth in emerging markets according the latest DisplaySearch Quarterly Advanced Global TV Shipment and Forecast Report . Softer price declines and inventory pressure at retail due to lackluster consumer demand continue to put pressure on TV brands.
"Q2'10 was a very strong shipment growth period due to greater price erosion and more confident consumers, so the comparison of this year's shipments to a year ago is tough, especially considering the surge of shipments in early 2010 due to anticipated demand related to the World Cup Soccer tournament," noted Hisakazu Torii, vice president of TV Research at DisplaySearch. "Due to weakening macro-economic conditions, similar to what happened during the global financial crisis of 2008-2009, the TV industry is becoming somewhat pessimistic and reducing inventory, especially in North America and Western Europe."
LCD TV shipments worldwide grew at least 20 percent each quarter in 2010, but so far have only risen nine percent Y/Y in Q1'11 and six percent Y/Y in Q2'11. The slowing growth has impacted both developed and emerging markets, with LCD TV units falling five percent and rising 19 percent respectively, both well below the rate of growth a year earlier. The main inhibitor to faster LCD TV price erosion, something that has a strong positive impact on consumer demand in the highly elastic TV market, has been the transition from CCFL to LED and slower component pricing declines. LED share increased from 18 percent of LCD TV shipments in Q2'10 to more than 43 percent in Q2'11, but still carries a 74 percent average premium across all sizes, though this is down from a 120-percent-plus premium a year ago. Critical LED backlight cost breakthroughs have been slow to materialize.
Plasma TV shipments had shown surging growth in 2010, increasing a remarkable 30 percent Y/Y after negative growth in 2009. The boost in growth had a lot to do with market pricing advantages against LCD for similar sizes and consumers who continued to focus on price. LCD TV prices started to narrow the gap this year, and the premium for a 42-inch class CCFL LCD narrowed from 13 percent in Q2'10 to less than one percent in Q2'11 over plasma, which is having an impact. Plasma TV shipments fell six percent in Q2'11 after double digit growth throughout 2010.
By region, China was still number one by a small margin over North America, each representing about 17 percent of global TV shipments. China had stronger growth, rising 10 percent Y/Y compared to a six percent decline in North America. The Asia Pacific region grew to number three for the first time, surpassing Western Europe, where retail inventory remains a problem. Despite concerns about weak demand following the Great Japan Earthquake, shipments of TVs in Japan surged 40 percent as consumers replaced older TVs with newer digital tuner equipped models ahead of the July 24 analog broadcast cutoff.
3D enjoyed a sizeable increase in market share during Q2'11, rising from four percent of shipments in Q1 to almost nine percent in Q2. The growth in share signifies that manufacturers have greatly expanded the number of 3D-capable models and reduced the premium associated with the technology, giving consumers more choice. There have also been a wider range of new sizes, down to 32 inches, and in the case of LCD, lower frame rate models with 3D available. DisplaySearch estimates that about a quarter of 3D TV shipments use passive 3D technology and the remainder use active shutter glass technology.
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