Long-term potential of LCD TV remains good

Dubai: The long-term potential for LCD and plasma TV market in Europe, Middle East and Africa (EMEA) is still good despite the global economic crisis and a downward revision of about 16 per cent in shipment forecast for 2009 and 2010, said an industry expert.

"2009 will see a strong growth in flat panel TVs, but the demand will decline for cathode ray TVs. The third quarter of 2009 will show first signs of recovery and the fourth quarter will be strong," Riddhi Patel, principal analyst for television systems, iSuppli Corporation, told Gulf News.

She said the reason for this is that by that time, there will be pent up demand from consumers, prices will be very attractive (after the declines) and the economy will be showing signs of recovery. This will give boost to the flat panel sales.

"We lowered the forecast for 2008 and beyond from what we had projected before. Lot of it is related to the slowdown in the economy," she said.

iSuppli has lowered the forecast for 2008 by more than eight per cent to 38.38 million units from the pre-crisis figure of 41.54 million units.

Total LCD shipments in the EMEA in the fourth quarter of 2008 are expected to stand at 8.4 million units while plasma is expected to be 1.8 million units.

Globally, LCD shipments in the fourth quarter of 2008 are expected to be 25.3 million units while plasma is expected to stand at 4.7 million units.

Despite the ongoing crisis, the market is set to witness a compound annual growth rate of about 14 per cent between 2008-2012.

The LCD segment is to witness a compound annual growth rate of about 16 per cent between 2008-2012 while the plasma TV segment is to witness a negative annual growth rate of about four per cent between 2008-2012

"Price declines are inevitable. Despite brands adding new features like 120Hz and connectivity options, prices will continue to decline, because there is an oversupply of LCD panels right now.

"Panel prices continue to decline and some panel makers, to clear the existing inventory, are selling panels below cost. This will help with reduction in retail average selling price," Patel said.

"Sony and Samsung are both aggressive in reducing their TV prices and also have a value product line up that competes with tier 2 and tier 3 brands.

"As they reduce their prices, it puts pressure on the other brands to offer further discounts as well. Price declines will be necessary to move TVs in the current state of economy.

"Increased availability and adoption of HDTVs has made consumers realise that they can watch much better and lifelike picture with their HDTVs," she said.

Patel said what has really helped HDTV sales is the transition to digital and the commitments that various governments made and aggressive marketing and promotions by the LCD industry to establish not only HD, but FullHD as a standard.

Now as the content availability increases, consumers' desire for HDTV will increase.