Revenues from MEA television industry plunge more than 67%

Dubai: The ongoing financial meltdown has dealt a further blow to the dwindling television market in the Middle East and Africa (MEA) with revenues plunging more than 67 per cent to $236 million (Dh866 million) in the first quarter of this year.

"The revenues in the first quarter of 2008 stood at a whooping $717 million. The demand has definitely slowed down in MEA region because of the ongoing recession and the dramatic slowdown in the cathode ray tube [CRT] shipments. The LCD market, will however, see a growth because of aggressive marketing by brands and their declining price points," Riddhi Patel, Principal Analyst, Television Systems, iSuppli Corporation, said.

For 2009, the research firm expects the total revenue to stand at $1.04 billion. There is a revenue decline from 2008 to 2009 because of drop in prices and slower shipments.

"A 32-inch LCD has the highest demand because it has reached the commodity price points and is an ideal first TV or a replacement TV size and we will see an increased number of LCD TVs with 120Hz and LED backlights this year," Patel said.

She said the prices will continue to fall this year as well because of the decline expected in the panel prices and to fuel end consumer demand. Definitely a strong rebound is expected this year.

"We do expect some of the smaller players i.e. Chinese and Taiwanese brands shipping products to the other regions to find it increasingly difficult to stay competitive with the premium brands like Samsung and Sony," Patel said.

Totally 665,000 flat-panel TVs (LCD and plasma) were sold in the first quarter of 2009, an increase of 13.29 per cent compared to 587,000 units in the first quarter of 2008. During the first quarter of this year 759,000 CRTs were sold.

iSuppli expects 765,000 flat-panel TVs to be sold in the second quarter of this year, an increase of more than 15 per cent when compared to the first quarter of this year as the Korean companies are going to be very aggressive.

Both the Korean companies retained its positions in the first quarter of the year. Samsung stays at number one by selling 286,000 units and holding a market share of 43 per cent, followed by LG with 157,000 units and a market share of 24 per cent and Panasonic with 27,000 units and four percent market share.

"The MEA region showed some slowdown in the first quarter which was a difficult quarter for the industry. The CRT and plasma televisions were primarily affected. However, the LCD televisions registered a strong year-on-year growth," Ram Modak, General Manager, Digital Media Business, Samsung Gulf Electronics, said.

He said the feedback from the market is that the volumes are looking up again in the second quarter, especially from May.

"With the launch of light emitting diodes [LED] televisions, we are confident of further consolidating our position in the region," Modak said.

"Globally LG is aiming for 16 per cent market share in flat-panel TVs and sales of more than 21 million TVs in 2009. By category, we plan to sell 18 million LCD TVs, giving it 15 per cent market share, and three million plasma TVs, for 19 per cent of the market. By achieving this goal," Sharath Kumar, Sales Manager, TV products, LG Electronics Gulf, said. Regarding Organic Light-Emitting Diode (OLED) shipments, Patel said parts of MEA markets which are affluent would like to own the latest technology personal TV.

iSuppli does not expect these TVs to be a huge part of the market soon because of its availability in smaller sizes and its manufacturing problems for larger sizes.

"We still have several issues to overcome in terms of cost and production and at this stage we don't have an availability date for OLED TVs in the Gulf," Modak said.

Technology trends: Looking ahead in 2009

- Rapid growth of Full HD (full high definition). The price gap between the HD and Full HD will decrease and most devices connecting to TV will be equipped with Full HD.

- 120Hz technology will gradually become basic for TVs after the release of 240Hz technology.

- A special wall mount that helps LED TVs to be mounted flush with the wall like a picture frame

- Wireless DLNA (Digital Living Network Alliance) connectivity to enjoy the contents from a laptop or mobile phone on the television screen.

- USB 2.0 connectivity, enabling consumers enjoy their movies stored on USB media on their large screen televisions

- Content library enabling consumers to store their favourite photos, games and recipes etc on the built-in flash memory on their televisions.