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China Leads the Charge Into Ultra HDTV — Really?

If Ultra HDTV lives up to its hype, it will be in spite of a couple of major drawbacks. Foremost is the near total lack of Ultra HD content to play on these new sets. Furthermore, even the HDMI connector to link the Ultra HD set to a device capable of playing back Ultra HD content isn't up to handling the higher Ultra HD bandwidth.

To begin, let's consider the hype. Digitimes Research of Taipei estimates that worldwide Ultra HDTV (also called 4K TV) shipments will reach roughly 12.8 million in 2014 and will grow fivefold to 68.2 million by 2017.

According to the report “TV Systems Databases: Monthly TV Shipments — June 2014” from the Consumer Electronics service of IHS Technology, the number of Ultra HD units will be slightly higher, 14.5 million units. More than 10 million units shipped this year represents a near fivefold jump in volume since last year, when only a couple million units shipped.

Carlos Angulo, senior manager of product marketing at the Irvine, Calif., TV manufacturer Vizio Inc., expresses the suppliers' optimism for Ultra HD: “Vizio kept tabs on consumer demand for a better viewing experience, combined with market trends, for the indication that Ultra HD is here to stay.”

Paul Gagnon, director of Global TV Research for NPD DisplaySearch, explains the phenomenon as follows: Chinese “consumers are purchasing the sets because they represent the latest technology, and these 4K TVs embody the best technology, which is very appealing to Chinese consumers.”

Falling premiums
“This is especially true at the rapidly falling [cost] premiums. Most Chinese consumers are not even using native 4K content, and many of the 4K TVs currently installed in homes from early adopters can't even connect to 4K sources because of format incompatibilities.” The Digitimes report cited earlier confirms Gagnon's contention, claiming that “more than half of the 4K TVs shipped throughout 2016 are expected to go to the China market where low-priced units are expected to drive most of the demand.”

This is probably difficult to digest, given the Western view that US consumers typically set the pace for new technology adoption as they did with the PC, smartphone, and every other high-tech gadget produced up to now. However, the International Monetary Fund predicts China will pass the US as the world's leading economic power, according to Chris Giles, economics editor of the Financial Times, in a story written on April 30 (subscription required). The IMF findings are based on purchasing power of consumers in their own economies. According to Gagnon, “The Chinese already have exceeded the West in 4K TV purchases, and will continue to outpace all other regions in sales. Primarily this is because of the much lower price premiums and greater competition.”

Chinese consumers in the millions, able to afford the latest Ultra HD sets, are also being nudged along by the consumer electronics Ultra HD set suppliers. Jon Peddie, president of Jon Peddie Research, says, “Panel and TV manufacturers are dropping the price of 4K product to stimulate demand thus resulting in greater volume. With increased volume, costs will decline, and manufacturers will eventually get ahead of the game. The consumer electronics industry has been playing this game for decades, and up to now it has worked for them.”

Consumer electronics suppliers are banking on the holiday buying season to move Ultra HD sets this year.

Vizio continued stoking the demand creation fire on September 23, announcing its P-Series Ultra HD Smart TV Collection. Vizio's Angulo explains that the collection features a powerful Spatial Scaling Engine to transform HD content to 4K UHD picture quality. The series includes HEVC (high-efficiency video coding — H.265) codec and 802.11ac dual-band WiFi for a better smart TV experience with Ultra HD streaming support from apps like Netflix.

Plus, the series is equipped with future-ready HDMI ports that support HDMI 2.0 (60 frames per second; current HDMI ports only handle 30 fps) and HDCP 2.2 (the next generation of copy protection for 4K content).

The company priced the product to move by offering a 50-inch version for $999 (availability coming soon), adding credence to Peddie's characterization of TV suppliers' marketing strategy.

To read the rest of this article, visit EBN sister site EETimes.

10 comments on “China Leads the Charge Into Ultra HDTV — Really?

  1. Daniel
    October 17, 2014

    “This is probably difficult to digest, given the Western view that US consumers typically set the pace for new technology adoption as they did with the PC, smartphone, and every other high-tech gadget produced up to now.”

    Jonah, everything depends up on the purchasing power of the customers and how much dispersible money they have. By knowing these factors most of the companies are offering discounts and offers using the festival seasons.

  2. SP
    October 17, 2014

    Are the people really buying HDTVS…. I feel the common user is ok with the regular LED TV and may not buy exclusively HDTV,

  3. Anand
    October 17, 2014

    It is undoubtedly a race to the top of the television market. The fancier the TV is the better feedback it gets. UHD tvs are just that. Also there are IOT television sets and curved TVs and whatnot. China leads in this sector because it has got nearby electronic supplies and labourers as well!

  4. FLYINGSCOT
    October 18, 2014

    I cannot believe China buys more 4k sets that the USA.  Chinese disposable income is lower that the USA. Chinese technology is somewhat behind US technology so the product offering should be less.  Also digital content in China lags dramatically that of the USA.  However if they have 6x the population then that might explain the number of sets.   

  5. Daniel
    October 20, 2014

    SP, during festival season it's a trend about going for a new one either by exchanging the old ones or by an outright purchase.

  6. Daniel
    October 20, 2014

    ” Chinese disposable income is lower that the USA. Chinese technology is somewhat behind US technology so the product offering should be less.  Also digital content in China lags dramatically that of the USA.”

    Flyingscot, in general it can be like that. But during festival  seasons soft loan and other various discounted schemes can tempt peoples to go for a new one.

  7. Hailey Lynne McKeefry
    October 21, 2014

    @Jacob, these geographic and cultural differences are really important. Thanks for bringing it up.

  8. Hailey Lynne McKeefry
    October 21, 2014

    @Flyingscot, the numbers make sense to me, just because of the sheer mass of people who live in China. A smaller percentage of a larger number can be a large number for sure.

  9. Daniel
    October 22, 2014

    “these geographic and cultural differences are really important. Thanks for bringing it up.”

    Hailey, these are real facts.

  10. t.alex
    October 31, 2014

    Only the rich in China can afford this kind of product. China population is huge we can't just use the number of rich people affording luxury products while out there numbers of poor people in China. And yes, rich peeps in China love to spend.

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