IHS: Global TV Shipments Fell 6% in 20121 Apr, 2013 By: Erik Gruenwedel
First overall market decline in 10 years not expected to rebound until 2015
Global TV shipments fell 6.3% in 2012, undermined by declining sales in Japan and softening demand in North America and Western Europe, according to a new report from IHS iSuppli.
Overall TV shipments in 2012 totaled 238.5 million units, from 254.6 million in 2011. Shipments aren’t expected to rise back to the 2011 level until 2015, when they will amount to 253.1 million units.
“Television shipments in 2012 declined for the first time for more than a decade, sounding the coda for the flat-panel replacement wave that deluged the business throughout the 2000s,” Tom Morrod, TV systems analyst at HIS, said in a statement.
While some specific events contributed to the downturn of 2012, such as the fall of sales to the Japanese market, the decline reflects a fundamental slowdown in the television market, with liquid crystal display (LCD) television shipments falling for the first time ever, according to IHS.
“Although television shipments will stabilize in 2013 and growth will return in 2014, developed markets have become saturated with flat-panel televisions,” Morrod said.
The TV market had been undergoing a slowdown prior to 2012 — down 1% in 2011 from 2010. By the beginning of this decade, most consumers in developed regions already had replaced their old cathode-ray tube sets with flat-panel models, and many buyers in emerging economies had also made the switch.
Combined with economic factors, issues related to government subsidies and the analog transition, the slowdown of the flat-panel replacement trend contributed to the major downturn in 2012, according to IHS.
North America and Western Europe both experienced significant shipment declines, while growth stalled in Latin America, the Middle East, Africa and the Asia-Pacific region. Only Eastern Europe and China continue to see rising shipments.
The biggest drop occurred in Japan, where shipments fell by 13.5 million units in 2012, accounting for the vast majority of the global decline of 16.0 million.
The decline in Western Europe was predominantly due to the economy, combined with the analog switch-off. Markets such as France, Italy and Spain have experienced severe declines following analog broadcast switch-offs in 2010 and 2011. At the same time, there were declines in the Netherlands, the United Kingdom, Portugal and Greece because of financial challenges.
There was, however, some growth generated by the more prosperous Central European nations, with Germany in particular still continuing to show impressive growth.
In North America, the decline was caused by a mixture of economic factors and by the fact that consumers had increased their demand in 2010 and 2011. By 2012, however, buyers had expended their disposable income for television purchases.
Meanwhile, the Asia-Pacific market stalled because of lower growth than expected in India, together with declining sales in established markets such as Australia.
The Middle East and Africa continued their overall growth, but strife in certain countries — particularly Syria — had a negative impact on television shipments.
IHS said the global TV market will stabilize this year, with shipments remaining flat compared with 2012, as economic conditions even out. Shipments will rise by 0.3% for the year. However, shipments will return to growth In 2014 with a 2.8% increase. The soccer World Cup, to be held in Brazil, will boost Latin America sales, while China is expected to continue to prosper.
By 2017 global television shipments will rise to 270.5 million units for a number of reasons — as Chinese manufacturers flood the Asia-Pacific markets with new models; as Japan, North America and Western Europe continue to recover; and as ultra-high-definition (UHD) and organic light-emitting diode (OLED) TV uptake becomes more affordable.
The LCD TV market fell for the first time ever on an annual basis in 2012, with shipments declining to 209.8 million units, down slightly from 211.3 million in 2011. However, shipments are expected to return to growth and continue expanding through 2017 as new technologies like Smart TV and UHD increases.
Plasma TV shipments fell to 13.1 million units in 2012, down from 17.9 million 2011. This is partly due to Panasonic significantly reducing its supply of plasma televisions, and partly due to large-sized LCD displays becoming increasingly cost effective.
North America continues to be a stronghold for plasma, as does China, but all regions experienced an annual decline in shipments. By 2017 it is anticipated that plasma will be a niche product, and that the market will have almost completely transitioned to LCD TV and to OLED.