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CCID: Flat TV, PMP segments drive China CE market in 1H07

Posted: 06 Sep 2007 ?? ?Print Version ?Bookmark and Share

Keywords:China consumer electronics? flat-panel TVs? HDTVs? DTV?

China's CE industry continued to grow rapidly in the first half of 2007, with the segments of flat-panel TVs and portable media players (PMP) thriving in terms of y-o-y sales and revenue growth.

According to CCID Consulting Co. Ltd, partly driving this growth was the continuous rise of domestic demand and the increase of export products, of which new consumer electronics grow faster.

The flat-panel TV shipments hit 3.3 million units, up by 126.8 percent y-o-y. The segment posted sales of $2.435 million, up 71.9 percent from a year-ago period. Sales of PMP units totaled 590,00 sets, while sales revenues exceeded $9.495 million, up 195 percent and 151 percent over 2006, respectively.

Industry status
According to CCID, dramatic price cuts drove LCD TV terminal sales, while plasma TV sales rebounded strongly. Increased input from manufacturers pushed forward the steady growth of the plasma TV market. Overall flat-panel TV sales continue to rise. HDTVs have replaced the more previously common TVs, while flat-panel TVs and DTVs are becoming the two major cores of the TV market. The government of China is actively pushing forward LCD panel projects and offering enterprises greater support, said the market firm. Moreover, color TV in China is gradually witnessing a trend of integration of HD, digital and flat-panel TVs.

As the MP3 market slows down, new products such as MP4 and PMPs are gaining more market shares, showing potential for continuous growth given the rapid increase of the segment both in unit shipments and sales.

In the mobile storage market, two trends have emerged. The first trend is towards large, secure and quick storage units, while the other units trend towards small, light and low-power consumption. As people download more often and have a greater need for storage, large capacity, secure and fast storage equipment has become a new favorite in the mobile storage market. However, price is still a major bottleneck affecting the penetration of mobile storage products. Most mobile storage products are priced slightly above what ordinary consumers can afford, said CCID.

Dynamic market
CCID reported the characteristics of China's CE market in 1H, particularly focusing on the segments of flat-panel TVs, MP3/PMP players and mobile hard disk/flash disk.

Overall market size for flat-panel TVs continues to grow, while the pattern of competition is changing, said CCID. In 1H 2007, foreign brands in the region continued to make big price cuts, increasing their sales, while domestic brands had no industry chain advantages. Under the pressure of rising panel prices at the upstream and insufficient supplies, domestic brand sales did not grow much. On the whole, flat-panel TV sales continued to rise. But, the pattern of competition changed: domestic brands saw a drop in their collective market shares, while foreign brands increased their market shares and were in a strong position. The 40-inch or larger TV sets saw their percentages rise and were favored in the market.

China's MP3 industry has matured. Presently, the MP3 market is slowing down, while large-screen video products are becoming mainstream, said CCID. A "small group-oriented" market has gradually taken shape and large- screen video products are said to lead the segment. Moreover, there is a trend of returning the focus to sound quality in the MP3 market. In other words, ultrathin, fashionable and pure audio MP3 grows well in a segmented market, according to CCID.

Due to the diversion of users by the large-screen video MP3 player market, the insertion card-type flash memory PMP player market encountered problems in 1H. Market growth slowed down, and there was a big drop in the market percentage. Meanwhile, Archos, Zarva, Aigo and Apple stepped up their efforts in the HD-PMP player market and adopted a price extension strategy. Sales of PMP units with 20Gbyte and 80Gbyte hard disk grew quickly, with market shares predicted to continue to grow.

Storage segment
For the mobile hard disk/flash disk segment, CCID noted that personal users become a new growth point. As storage becomes more frequent and numerous mobile storage firms deepen their market development efforts, mobile storage products will thrive in the next two years. Most industry users and computer DIY users will make mobile storage a kind of standard computer configuration. As market size continues to expand, product use rate is also poised to rise, which will greatly improve product performance. The continuous expansion of market size and the improvement of technologies promote product prices at a more reasonable level.

The mobile hard disk market is growing steadily and 40Gbyte products have become mainstream in the marketplace. Competition among mobile hard disk brands remains stable. The flash disk market is also growing quickly, with 128Mbyte products becoming absolutely mainstream. Both segments experience a drop in the level of market concentration.

CCID concluded three development trends for the market: 3C integration is a major trend for electronics, consumer electronics will have more personalized designs and the digital home will be a future growth point for consumer electronics in China.

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