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Watching TV Sales and Display Demand: 3D and AMOLED top of new wave

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With the 'wait and see' of consumer spending holding on even through the back-to-school season, most sectors are feeling the impact of lighter than normal sales.  Traditional LCD and plasma TVs are no exception, even as the US enters the Fall sports momentum that often brings along new large screen purchases.  A recent iSuppli survey underscores just how deep the demand-sparse situation cuts presently:

 

"Spooked by a sputtering economy, an overwhelming number of American consumers are choosing to forgo purchasing […] a  new flat-screen television.  […] based on the results of a survey conducted during the second quarter of 2011, […] an unusually high proportion of respondents—83 percent—had no intention of buying a new TV set within the next 12 months."

While consumers wait to see what will happen with the US economy and their employment situation, as the US still hovers around 9.1% unemployment levels, the willingness to spend on items becomes more constrained.  According to the iSuppli research, this demand softness is complicated by pricing which is not following demand weakness: "Compounding difficulties for the consumer, U.S. flat-panel TV prices rose for the fourth straight month in July, according to another IHS iSuppli report on TV pricing and specifications, with the latest prices averaging $1,150, up 1.5 percent from June." (iSuppli's pricing report is available here). 

However, all is not so downtrodden, when we focus our data lens to newer TV features and options, such as 3D, there is a brighter market picture, as evidenced by DisplaySearch's recent market research

"Shipments of 3D-capable large-area TFT LCD panels increased to 5.2 million units in Q2, growing by 124% Q/Q. Shipments of 3D panels were primarily for LCD TVs, reaching 4.9 million units in Q2’11, 118% Q/Q growth, and pushing the 3D penetration in LCD TV panels from 4.5% in Q1’11 to 9.3% in Q2’11."

These are significant gains, particularly in comparison with traditional TFT LCD TVs of the similar size.  Perhaps one reason for this cross-over to 3D, despite the lingering questions of the longevity and maturity of the 3D technology is that pricing for 3D and LED-based TVs is dropping, in contrast to the traditional LCDs.  Additionally, the proliferation of gaming and internet-connected TVs is promoting the more widespread adoption of these newer TV technologies (again, supported by pricing that IS aware of the present market realities).

With energy efficiency and picture quality features on its side, LED TFT TV and displays are seeing gains.  According to another DisplaySearch report here, the energy efficiency feature is particularly driving (continental) Europeans to favor replacing their (still) CRT TVs with LED TVs, an important market and demand motivator for OEMs to supply retailers in the EU (see also here for the latest IFA news from DisplaySearch).

The improvements and price breakthroughs of LED-based TVs is also supporting the rise in small- to medium-sized displays (SMDs) for handheld consumer devices (that is, including AMOLED and OLED under an umbrella 'LED' grouping).  Touchscreen demands, 3D-gaming, streaming video and internet TV, as well as various digital imaging requirements are quickly pushing handheld displays to improve feature offerings more quickly than TVs (see this recent report from ElectroIQ).  This feature improvement is working hand-in-hand with the still strong smartphone and tablet PC sales cycles that are defying other consumer electronics muted demand (see here and here for recent iSuppli forecasts of SMD and media tablet growth).

The demand question cannot be lightly put aside though, even with the significantly positive results for 3D TVs and LED-based SMDs.  The effects on the electronics supply chain are rather obvious, as companies need to be aware of new strategies for maintaining their market ecosystems.  One example of a critical market strategy within the display sector is the new joint-venture (JV), Japan Display, forged this week out of the collaboration of Sony, Hitachi, Toshiba, and Innovation Network Corp. of Japan (INCJ) with the goal of creating a strong ecosystem for research and market presentation of new SMDs (see this report from EETimes Asia for more details on the JV). We expect to see more of these strategic responses by OEMs and along the supply chain as long as demand conditions remain tough.  The benefit is that these new JVs will help push new market strategies for R&D, devices, and healthy market competition/cooperation that will hopefully translate into ways to prick new demand interest.


Lisa Ann Cairns, Ph.D.
Written on Friday, 02 September 2011 11:50 by Lisa Ann Cairns, Ph.D.

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