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Wednesday, July 23, 2014
Ultra-High-Definition TVs Still Lack Market Penetration

Ultra-high-definition televisions (UHD TVs) continued to make slow and steady inroads throughout the world, but their share of the overall flat-panel TV market remained minimal by the end of May, suggesting that UHD TV pricing in the market remains too high to gain meaningful share, according to IHS Technology.

Among the top 13 brands for liquid-crystal-display televisions (LCDTV) worldwide, the share of UHD TV shipments reached 5 percent in May, up from 4 percent in April, 3 percent in March and 2 percent in February, as shown in the attached table. But while UHD TV share has expanded by at least 1 percentage point for the last three months, growth hasn’t budged much since September last year when the market was already at the 2 percent level. The top 13 brands account for more than 75 percent of total LCD TV shipments, and also represent over 90 percent of overall UHD LCD TV shipments.

UHD TV shipments this year are projected to grow to 14.5 million units, up from just 2.0 million in 2013, as global brands deploy aggressive marketing efforts and roll out new models.

“Growth in this year’s global UHD TV market is a reflection of plans among TV makers, especially the Chinese, to increase sales. And expansion in UHD TV volume is mostly scheduled for the second half this year,” said Jusy Hong, principal analyst for consumer devices.

UHD TVs are considered part of the LCD TV market at present. There are no UHD plasma-display-panel televisions (PDP TV), and UHD organic light-emitting-diode (OLED) TVs will be available at the end of this year. UHD TVs have much higher resolution than conventional high-definition sets, but the dazzling images come at a steep trade-off: their prices can be several times those of LCD TVs.

“In China, for instance, the share of UHD TVs continues to stay below 10 percent despite vigorous promotion by brands because high UHD TV pricing acts as a barrier for wider acceptance,” Hong said. That observation, while true of China, the world’s biggest TV market, can also be extended to the largest UHD TV markets worldwide. For China’s biggest sales season for the year during the country’s national holiday in October 1, TV makers, however, are planning more aggressive UHD promotions to boost penetration.

Among UHD TV makers in May, the Chinese had the largest proportion of UHD TV shipments in relation to total LCD TVs, at 9 percent; followed by the South Koreans at 5 percent and by Japan at 2 percent. The South Koreans, however, shipped more UHD TVs, thanks to the size and heft of its two makers—Samsung Electronics and LG Electronics—which also happen to be the world’s largest TV manufacturers.

The two South Korean makers accounted for 46 percent of total UHD TV shipments in May, compared to a combined total of 45 percent for the six makers of Chinese origin—Changhong, Haier, Hisense, Konka, Skyworth and TCL. Chinese TV brands are popular in their own country but not overseas, and the challenge facing them if they wish to increase global market share is to boost quality, not just rely on lower pricing, IHS believes.

Flat-panel televisions overall amounted to 18.1 million units in May, down 6.4 percent from April but up 7 percent from the same time a year ago. Of the total, LCD TVs—including UHD sets—accounted for 17.4 million units, with PDP TVs making up the remainder at 708,000 units.

In particular, plasma sets have been enjoying higher-than-expected sales during the first half of this year because of promotions tied to the World Cup, but shipments are projected to fall sharply now that the quadrennial soccer spectacle is over.

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