Technologically advanced televisions like organic light-emitting diode (OLED) and ultra-high-definition (UHD) sets will drive the U.S. TV market moving forward in the next few years, even though the lack of widescale manufacturing means that prices for such sets initially will be very high, according to an IHS Television Systems market tracker report from information and analytics provider IHS.
The introduction of OLED and UHD TVs into the U.S market comes at a time of declining TV shipments in the country and ever-falling average selling prices, both of which translate into a dent overall in revenue for TV makers. TV shipments into the U.S market fell last year to 37.7 million units, down 6 percent from 39.9 million in 2011. Projections this year don't appear to be much better, calling for a second straight year of decline to 36.6 million units, before shipments pick up in 2014 with 38.1 million, and then continue to grow from that point. By 2017, U.S. TV shipments will amount to some 38.9 million units.
For OLED TVs, just 31,000 units are expected to ship in 2014 into the U.S. market, with the number rising to 320,000 in 2015. Originally launched in 2009 and 2010 with Sony and LG Electronics releasing 11- and 15-inch OLED TV screens, the TVs did not prove a hit with consumers because of the small sizes of the screens and the stratospheric prices involved.
Starting in the first quarter this year, however, 55-inch OLED TVs will appear on the market-first from LG and then from Samsung Electronics in the second half of this year. OLED TV sets from both companies were present at this year's CES show in Las Vegas.
Overall, the South Koreans will have a head start over their Japanese rivals, including Sony and Panasonic, both of which are collaborating on the development of OLED technology to decrease time-to-market, ahead of a projected 2014 launch in an effort to counter the mighty Korean onslaught. Early ASPs for OLED TVs will be extremely high-well in the $9,000 to $12,000 range. Manufacturers claim that OLED TVs produce more vivid images, and the sets feature profiles as thin as 4 millimeters in thickness.
Alternative OLED screen sizes at the 60- and 40-inch segments will be available by 2016. This is the time when volumes will also start to reach more significant levels, with prices dropping as a result. Finally in 2017, large-scale production of OLED TVs will ramp up, delivering $1.7 billion in revenue that year to the TV industry.
Another high-end television, the so-called UHD because it boasts 4K-or four times-the resolution of current 1080p TVs, will also become available on the U.S. market. Shipments began in low volumes starting the fourth quarter of 2012 and primarily in large screen sizes. Like OLEDs, UHD TVs will require some time before pricing becomes affordable to the mass market. Some 1.6 million UHD sets will ship by 2017, accounting for slightly over 4 percent of the total LCD TV market by then.
The emphasis at CES was more on 4K than on OLED. The current panel supply for 4K is not huge, but it exceeds OLED and-importantly-is available from a range of panel suppliers, not just LG Display and Samsung Display. As a result, most manufacturers showed models with screen sizes in the 55-, 65- and 84-inch range, with plans to launch more models over the course of this year. A Taiwanese panel manufacturer has already started promoting 4K panels with relatively low 4K premiums over its Korean rivals; panel pricing for 4K overall is expected to fall to affordable levels by the end of 2013. Also at CES, Panasonic and Sony showed 4K OLED prototypes of their own.
Between the two technologies, UHD is likely to supersede OLED in the early days, particularly as it has larger scale at the moment. But UHD is a technology primarily for large screen sizes, and the benefit of higher resolution will be visible on such sets.
In general, however, manufacturers are finding it hard to make handsome margins from televisions in the face of increasingly price-savvy consumers. This is especially true in a mature TV market like the United States, where sales have also become highly seasonal, linked to huge selling events like the Super Bowl weekend, Black Friday and Christmas.
For plasma TVs, the end is near, with shipments into the U.S. market anticipated to cease after 2015. Plasma's decline will accelerate as manufacturers continue to focus on LCD TVs for scale and as they develop new technologies such as OLED, UHD and interactive Smart TVs.