Organic light-emitting diode (OLED) televisions are on course to help to bring some relief to the flagging U.S. TV market in 2015, generating $1.2 billion in revenue and shipping some 370,000 units during the year, according to a new IHS iSuppli U.S. TV Tracker report from information and analytics provider IHS.
Although U.S. TV revenue is set to decline throughout the coming years, increased shipments of high-priced OLEDs will mitigate the impact of the decrease starting in 2015.
OLED TV shipments during the next four years will increase substantially from the 3,100 units forecast for this year, and shipments will jump to 1.9 million units in 2017. The increase in shipments will be driven by a combination of mass production, competition from more brands entering the market and more available screen sizes. This will result in an average selling price (ASP) that is more affordable to consumers, which in turn will increase the awareness and appeal of OLED TVs.
As a result, OLED TVs will represent an increased percentage of revenues than of shipments in the U.S. market, helping ASPs and profits for suppliers. As liquid-crystal display TVs (LCD TVs) continue to decline in revenue over the next four years, dropping to $11.9 billion in 2017, down from $18.3 billion in 2012 and 2013, OLED TVs will grow to $3.1 billion by 2017, up from virtually nothing in 2012 and 2013. OLEDs also will help to fill the gap left by the decrease in plasma display panel television (PDP TV) shipments.
However, this revenue and shipment growth is dependent upon the decline of OLED TV prices and the increase of large-scale manufacturing by suppliers. If these two important keys to OLED growth do not happen, the U.S. TV market will continue to struggle financially in the years to come.
More brands, more OLEDs
Currently, the two companies developing OLED televisions on the market are LG Electronics and Samsung. As these two Korean giants have gotten off to a fast start in this small and expensive market, they will be the companies most likely to increase their offerings to wide-scale manufacturing.
However, in the coming years, new companies will establish a presence in this market, including Sony and Panasonic, both of which demonstrated their OLED TV technologies at the Consumer Electronics Show (CES) this year. But these products likely won't arrive on store shelves until 2014 or 2015.
Some of the other brands may not join the OLED party until much later. Sharp is dedicated to larger screen sizes, so unless the price of these TVs drops substantially, the company may remain out of the fight. Vizio, which is positioned in the United States as a value brand, also may avoid OLED TVs.
IHS believes that both of these companies will be heavily supporting ultra-high definition (UHD) as the next premium technology. Eventually both Sharp and Vizio will have OLED TVs, but not for years to come.
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