US Television Market Down in Q1 due to Weak Plasma Sector

17 July 2013

The U.S. television market contracted by nearly 10 percent in the first quarter compared to the same time a year ago as shipments plunged in the moribund plasma sector and declined marginally in the key liquid-crystal display (LCD) segment, according to a U.S. TV market tracker report from information and analytics provider IHS.

Total TV shipments to the U.S. market amounted to 6.7 million units during the January to March period, down a sharp 9.5 percent from 7.4 million units during the same three-month period in 2012. This marks the second year of decline in the first quarter, and the latest drop was steeper than the 8.6 percent downturn between the first-quarters of 2011 and 2012.

The main culprit for the decidedly lower shipments in the first quarter this year was the debilitated plasma sector. Here shipments fell to 500,000 units, down a substantial 38 percent from 810,000 last year. Plasma shipments in the first quarter last year also were down compared to the same time in 2011, but the retreat then amounted to a less severe 20 percent.

The plasma sector will continue to decline moving forward, unable to stem the hemorrhaging as consumer tastes inexorably shift to LCD TVs and to even more advanced technologies, such as organic light-emitting diode (OLED) and ultra-high-definition (UHD). Plasma TV shipments into the U.S. will continued for just two more years, IHS predicts, ceasing by the end of 2015. Samsung, LG Electronics and Panasonic remain the only players in the U.S. market, even though Changhong of China and Sanyo from Japan continue to contribute to global plasma totals for the time being.

Compared to the heavy downshifting of the U.S. plasma sector, the domestic LCD segment suffered a relatively light blow, down just 5 percent to 6.2 million units. And unlike the plasma segment where the first-quarter trouncing this year was much worse than for the same period in 2012, the LCD segment showed a slight improvement this year as losses narrowed from the 7 percent decline of 2012.

Overall, the first quarter is a soft time for the U.S. TV market after the traditionally strong fourth-quarter period, so first-quarter results are more meaningful when measured against year-ago periods than by sequential quarterly comparisons. Of the last five years, the first quarter in 2011 proved the most robust, marked by a solid 5 percent increase in shipments at that time.

The second quarter of every year then picks up from the first-a phenomenon expected to take place again this year as shipments rise to an estimated 8.0 million units. From there, the U.S. TV market moves on to a position of strength in both the third and fourth quarters from a cavalcade of cascading holidays, and the industry consolidates the steady gains it has made throughout the year.

Given the significant decline this year in plasma shipments, however, total TV shipments by the end of 2013 are not expected to climb compared to last year. Instead, shipments are forecast to amount to roughly 36.0 million units, down an anticipated 4.0 percent from 37.6 million units in 2012.

The U.S. television market will then start to recover next year as growth in LCD shipments offsets the losses of the plasma sector. The LCD segment will continue to be the main source of revenue for the U.S. TV market in the next five years, even though OLED and other high-technology areas will start contributing to coffers as well.

One good area of growth at present is the large-sized LCD segment covering sizes 50-inches and larger. In the first quarter, combined shipments for such sizes reached 1.6 million units, up 72 percent from the same time last year.

Among TV brands, Samsung was the largest manufacturer in overall U.S. TV shipments for the first quarter, but Vizio led in the LCD segment. LG, Funai and Sanyo rounded out the Top 5 in both lists.

Read more >> Large-Size LCD TV Shipments Increase 72 Percent in Q1 2013

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