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Report: LCD TV revenue to hit $76M in '09

Posted: 25 Jun 2009 ?? ?Print Version ?Bookmark and Share

Keywords:LCD? TV market? digital TV?

The outlook for TV demand in 2009 improved following strong Q1 results and increased stimulus spending by governments, especially by China, prompting DisplaySearch to release a revised report for Q2 09.

Total TV shipments are still expected to drop to about 200 million units worldwide, but LCD TV shipments are forecasted for unit growth. DisplaySearch increased its bet from its previous forecast of 120 million up to 127 million units. However, LCD TV revenues will still decline by about 6 percent in 2009 due to price erosion and the strong shift in volume to discount retail channels, such as Walmart in the United States. This is also better than previously expected as technologies including 120-/240Hz and LED backlight models grow.

DisplaySearch's increased unit forecast is a 21 percent growth over 2008 and a 63 percent share of global TV shipments. The 2009 revenue outlook was increased from $66 billion to $76 billion, primarily based on rising LCD panel costs since April that will drive slower ASP erosion in 2H 09.

"This is good news for global LCD TV revenues overall, but could have a negative impact on demand in developed markets, like North America where consumers are more sensitive to sale promotions and prices" noted Paul Gagnon, director of North America TV research. "Still, emerging markets offer tremendous growth opportunity, even at current price levels, and the slower ASP declines shouldn't have a strong impact on rising demand."

In China, the LCD TV forecast for 2009 was increased from 18.8 million units to 23.6 million units. The Chinese government strengthened its rural home appliance purchase subsidy program and introduced additional incentives to consumers trading up from CRT to LCD in cities, prompting the increase.

DisplaySearch cut its forecasts due to the uncertainty in the economic outlook after the impact of the recession on global TV demand in Q4 08, shown in Figure 1. Recent signs of life returning to the TV market are reflected in the increased forecast.

Figure 1: Q2 09 LCD TV unit forecast revision
Source: Quarterly Advanced Global TV Shipment and Forecast Report

Shipments of 120Hz and 240Hz frame rate LCD TVs in 2009 are now also being tracked by DisplaySearch. According to Hisakazu Torii, VP of TV market research, "The shift to higher frame rates is critical to LCD TV manufacturers for increasing both performance and profitability, especially considering the rapid pace of commoditization in the category." 120Hz frame rate models will account for 29 percent of LCD TV revenues worldwide in 2009, while 240Hz will grab about 5 percent of revenues. By 2013, 120Hz will account for 31 percent of LCD TV revenues, while 240Hz accounts for more than 20 percent."

Figure 2: Worldwide 30-inch+ LCD TV revenue share by frame rate
Source: Quarterly Advanced Global TV Shipment and Forecast Report

Meanwhile, plasma TV is expected to fall about 2 percent year on year to 14.1 million in 2009 after strong 28 percent growth in 2008. This outlook is down slightly from DisplaySearch's previous forecast as a result of increased consumer preference overall for sub-40-inch screen sizes amid heightened price sensitivity during the recession. 1,080p penetration continues to rise, accounting for 32 percent of plasma TV shipments in 2009, but quickly accelerating to more than 50 percent in 2010 and 80 percent by 2013.

DisplaySearch's total global TV forecast is 200.4 million units in 2009, down 3 percent y-on-y, the first decline in total shipments in recent memory as the global recession and rising unemployment continue to take a toll on demand. But the slowdown will be temporary as the worldwide economy emerges from recession and new markets enter the initial stages of the flat panel and digital TV transition.

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