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U.S. LCD TV Market Dips

EL SEGUNDO, CA — U.S. shipments of liquid-crystal display televisions (LCD TVs) are expected to decrease on an annual basis for the first time in history in 2010, with sales impacted by lingering economic concerns and slow price declines for most of the year, according to the market research firm iSuppli, now part of IHS Inc. (NYSE: IHS).

Shipments of LCD TVs in the United States are expected to amount to 31.9 million units in 2010, down 1.2 percent from 32.3 million in 2009. While this may seem like a small decline, it represents a shocking reversal for a U.S. LCD TV market that has expanded robustly during every year since volume shipments commenced in 2006.

“Year after year, in both good economic times and bad, U.S. consumers always have found a way to devote more of their disposable incomes to purchasing sleek, new flat-panel LCD TVs,” said Riddhi Patel, director and principal analyst, television, for iSuppli. “However, in 2010, the realities of the economy finally caught up with the LCD market, causing sales to decline for the first year ever. Despite this setback, shipments will resume their growth in 2011 as consumer confidence rises again.”

Flat economy, flat shipments
Although economic conditions improved in 2010 compared to 2009, U.S. consumer confidence remained low as unemployment stayed high. Meanwhile prices for LCD TVs did not decline at their customary rapid pace in 2010. With most consumers already having purchased a flat-panel set of some type during the preceding years, the combination of economic uncertainty and paucity of deals spurred a decline in shipments.

Given the historical trend in the LCD TV market, consumers have grown to expect that price declines would continue to be aggressive in 2010. However, because of supply constraints during the first three quarters of the year, prices did not decline enough to motivate consumers to buy more sets.

Furthermore, consumer electronics makers also de-emphasized price declines as a means of promoting sales.

“LCD TV makers shifted strategy in 2010, moving away from the traditional market-growth approach of cutting prices to stimulate sales—and toward a value-added tact of offering sets with more advanced features that retained their price power,” Patel said. “These features included LED (light-emitting diode) backlighting, built-in Internet access and 3-D display.” LCD TVs also faced increased competition from other consumer electronics devices.

“Alternative consumer electronics products—including iPads, eBook readers and portable media players—all vied for the same discretionary income that LCD TVs did,” Patel said.

Brighter picture for LCD TVs in the future
iSuppli is forecasting growth will return for U.S. LCD TV shipments in 2011 and beyond. Rising consumer confidence during the coming years will boost sales of consumer electronics, particularly televisions.

LCD TV shipments in 2011 also will be boosted by the shift to LED-backlit products, which use less electricity than traditional cold cathode fluorescent tube sets. Many state and city governments are instituting energy consumption laws and consumers are becoming more environmentally aware, spurring sales of these sets. Furthermore, aggressive pricing of LED-backlit televisions will encourage consumers to resume their replacement of older flat-panel sets.

Global outlook remains bright
While shipments in the United States will decline in 2010, the global LCD TV market will continue to expand this year, rising by 20.3 percent.

“The global LCD TV market continues to grow on the strength of emerging markets like China, parts of the Asia Pacific region and Latin America,” Patel said. “These regions are seeing strong growth as LCD TVs become more affordable.”

For more information on this topic, see: iSuppli

10 comments on “U.S. LCD TV Market Dips

  1. t.alex
    December 9, 2010

    Nowadays, I can see customers are looking more for add-on features rather than a simple LCD TV. HDMI, DLNA are definitely big plus. Nevertheless, it seems consumers are waiting for the price of LED TV to drop further instead of grabbing an LCD at the moment.

  2. Clairvoyant
    December 10, 2010

    T.alex, I wouldn't base the small decline in LCD purchases on consumers waiting for the LED versions. I would think that this would have a minor or no influence on most consumers. But that is my opinion.

  3. itguyphil
    December 11, 2010

    I concur. I walked into BJs the other day and was mesmerized by the picture of a 55″ Samsung LED tv. It was amazing. The price was a little steep but compared to the LCD counterpart, I'd wait it out.

  4. jbond
    December 11, 2010

    I would agree the look of the LED is amazing and it is much more clear than the LCD it is worth the wait if you don't want to pay the extra right now. Also just before superbowl is the best time to purchase a television.

  5. Himanshugupta
    December 16, 2010

    I recently read a report published on WSJ that people now spend more time on internet than in front of television. I think the idiot box is loosing its shine unless something changes with the way we (passively) interact with tv. I was talking to my cousin, who works for samsung consumer devices section, sometime ago. He told me that they are working on add-on features in tv such that people could also be actively involved dring they watch tv.

  6. Tim Votapka
    December 16, 2010

    I wouldn't worry about the slight down-stat on LCD shipments. There's been such a huge drive to replace the obsolete CRT monitors everywhere, the curve had to level off at some point. The question I'd pose is in what vertical markets will we see the most growth occur for these displays? Medical facilities? Education? Hospitality?

  7. kumar1863
    December 22, 2010

    LCD TV technology has higher electrical power consumable and less life-time technology Compared to LED TV and less consumption and more life-time to CRT TV. The sales came down because of unemployment over the globe in last year. To improve the sales we need to add some enhancement like in built Wi-Fi accessibility and web-camera to LCD TVs. 

  8. Tim Votapka
    December 22, 2010

    With networking and storage capacity too!

  9. saranyatil
    December 30, 2010

     

    Nowadays everyone is carried away towards smart phones and tablet PCs this could also be a reason for reduction in sales of TV s another reason is definitely the price been tagged for LED. by next year trends will definitely change.

  10. Backorder
    December 31, 2010

    What I would like to know is whether any industry could actually drive the production of LCDs up, offering a cost-performace tradeoff sitting between the CRT and the LED. LCD still has unique value propositions and there could be applications we dont know yet.

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