Business | January 18, 2012
LED-Backlit Shipments to Dominate US Market for First Time
In a historic shift that marks a permanent changing of the technological guard, television sets using light-emitting diode (LED) backlighting have taken the lead in the U.S. flat-panel TV market, eclipsing rival sets featuring cold cathode fluorescent lamps (CCFLs).
Shipments of LED-backlit liquid crystal display (LCD) televisions amounted to 4.09 million units in the third quarter, compared to shipments of 3.85 million units for sets featuring the formerly dominant CCFL technology, according to an IHS iSuppli U.S. TV Market Tracker report from information and analysis provider IHS. LED and CCFL are the two technologies used for backlighting LCD televisions, but the third quarter marks the first time that LED assumed a larger portion of the market at 44 percent, compared to 41 percent for CCFL. The remaining 15 percent of the market is represented by plasma TV sets, which do not require backlights. Featuring thinner panels, improved picture quality and lower power consumption, LED-backlit LCD TVs will continue to account for an increasingly larger share of the overall flat-panel market, further driving down CCFL LCD TV shipments, as shown in the figure attached. LED TV shipments in the second quarter of 2012 are projected to reach 5.56 million units, compared to just 1.84 million for CCFL sets. “LED-backlit TV shipments are expected to see rapid double-digit growth in the coming years as brands focus on marketing this feature and making LED-based models standard in their lineup,” said Lisa Hatamiya, displays researcher for IHS. “Aggressive prices also will help their uptake and drive consumers to purchase the sets.” LED leads the way LED technology is finding its way into all sizes in the LCD spectrum. Nonetheless, some categories will be better penetrated than others. For instance, penetration already is widespread in the 50-inch-and-larger group, while only 15 percent of 30- to 34-inch TVs feature LED technology because of the large $20 differential between LED and CCFL panels in this size group. The biggest growth for LED in 2011 will occur in the 42- to 44-inch group, where the segment is expected to expand by an outsized 230 percent. But should the economy experience a downturn in the months to come, the large-sized LED TVs will be the ones most affected, given that smaller-sized sets and their less costly price tags likely will be more appealing in a slower economy. Consumers prefer smart TVs The presence of new features in a set continues to be a major consideration among American consumers buying a TV, but not all new features are equally desired. For instance, Internet connectivity is no longer considered a luxury or optional feature, but one demanded by consumers, with brands now creating robust application stores to meet viewers’ needs. In comparison, not all consumers are willing to pay for 120-hertz (Hz) refresh rates, IHS iSuppli data show, though the feature’s contribution to a smoother overall TV picture is increasingly being understood. Another technology, 3-D, remains slow in the uptake, with consumers remaining skeptical and unwilling to pay for the sets’ higher prices—even in the face of improving technology and a gradual expansion of the 3-D movie catalog in videos. In the plasma segment of the flat-panel TV market, shipments continue to be strong for now because of aggressively priced plasma sets compared to their LCD TV counterparts. Most plasma sets also have higher specs that increase their appeal, such as full high resolution at 1080p, 600Hz refresh rates, and 3-D in a growing number of cases. Sets sized 50- to 54 inches appear to be most in demand at present because of their price advantage over similarly sized LCD models: an average price of $1,214 in October 2011 for plasma, compared to $2,085 during the same period for an equivalent-sized LCD set, according to the IHS iSuppli U.S. TV Price Tracker report. Nonetheless, plasma shipments will decline 1 percent this year, compared to a 25 percent growth rate in 2010, and negative growth is projected from 2012 onward. All told, U.S. flat-panel TV shipments amounted to 9.37 million units in the third quarter, up 7 percent from 8.75 million units in the second quarter. Of the third-quarter total, 7.94 million units were LCD, while 1.43 million were plasma sets. The upcoming holiday season could spur demand, but prices and the volatile economy remain factors that must be considered as the year comes to a close.
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