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3DTV Shipments to Top 3.4M Units This Year, Despite Challenges

28 Jul, 2010 By: Erik Gruenwedel

Worldwide shipments of 3D-compatible television sets is expected to reach 3.4 million units this year, and nearly 43 million units by 2014, despite a dearth of 3D content (broadcast and packaged media) and confusion regarding 3D glasses, according to a new report.

DisplaySearch, a Santa Clara, Calif.-based research firm, said 3DTV shipments in the United States are expected to reach 2 million units this year, with market penetration expected to grow from a 5% share of total flat-panel TVs this year to 37% in 2014.

“TV manufacturers have managed to launch products very rapidly,” said Paul Gray, director of TV electronics research with DisplaySearch. “We have seen a full range of 3D TVs in sizes from 40' to 63' already available, and without a doubt, there will be another wave of new products at the IFA show in Berlin in September.”

Despite the forecasted growth for 3DTVs, the consumer electronics industry is running ahead of content availability, as 3D content for TV remains limited to a small number of movies, plus some sports events on pay TV, which are dependent on cable providers, according to DisplaySearch.

Major movies in 3D, such as Avatar, will not be available for 3DTV in 2010. In addition the low penetration of Blu-ray players, and especially HD broadcasts, outside of North America and Japan affects content availability.

Indeed, Warner Home Video yesterday announced it would bundle three Imax 3D movies with select LG Electronics 3DTVs, home theater and Blu-ray Disc players.

The report said consumers may be tempted to wait for the ecosystem to develop in order to have enough material to watch. Coupled with other obstacles for 3D implementation such as consumer perceptions of 3D glasses (namely cost), and burgeoning interest in Internet-connected TV, continues to challenge wider adoption.

Indeed, shipments of Internet-connected TVs (IETV) is expected to dwarf 3DTV, topping 27 million units this year, according to a report from iSuppli Corp.

The El Segundo, Calif.-based research firm said 3D is dealing with a number of barriers, including cost, content availability and interoperability, while IETV provides immediate benefits by allowing TV viewers to access a range of content readily available on the Internet, including Netflix movies and Blockbuster On Demand.

“Despite aggressive promotions from the industry and intense consumer interest generated by Avatar and other titles, the 3DTV market in 2010 will be limited to a small pool of enthusiastic early adopters,” said Riddhi Patel, director and principal analyst for television systems at iSuppli. “In contrast, IETV is entering the mainstream."

Shipments of IETVs this year will rise nearly 124% from 12.3 million units last year. Unit shipments will grow more than 50% for the next two years, and then continue to increase at double-digit rates until the end of 2014. Global shipments are anticipated to reach 148.3 million units, accounting for 54% of the total flat-panel TV market.

“The arrival of Internet-enabled TV models is part of the ongoing evolution and enhancement of TV sets,” Patel said. “Because innovation is a must in order to drive consumer adoption and replacement, the TV industry has embarked on a path of enhancing the consumer experience through interaction with their TV sets.”

The report said North America and Western Europe will make up the largest consumption market for IETVs from 2010 to 2014. Japan will be the third largest market until 2012, after which it will drop to fifth place, ranking behind both China and the collective Asia-Pacific region.

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