U.S. 3D TV Sales to Reach 6 Million Units in 2011, LG Executives Say

SAN ANTONIO -- Despite falling short of sales targets this year, sales of 3D TVs will recover to 5 to 6 million units in 2011 as manufacturers shift to marketing the technology as a feature and not the main reason for buying the set, LG Electronics executives said at the company’s dealer show. Sales of 3D TVs will hit 1.7 million units this year, below forecasts of as many as 4 million units, the executives said.

The drum beat for 3D began at last CES, but a shortage of Blu-ray 3D and programming content slowed adoption of the technology despite promotions that included packaging movies with TVs. While 3D TVs will account for less than 5 percent of total U.S. sales this year, that will jump to 15 to 16 percent in 2011, said Tim Alessi, director of home entertainment new product development. “We are not counting on 3D alone as the growth driver in 2011, but as a feature that’s going to help in engaging interest in the category,” Alessi said.

The sets should be sold as models that deliver a good picture and also can display 3D content, said Jay Vandenbree, LG’s senior vice president of consumer sales. The launch and push behind 3D TV was “just too early” and the timing “was wrong,” Vandenbree said. Vandenbree, a former Sony executive, didn’t mention LG’s competitors. Sony, Panasonic and Samsung have led the charge in promoting 3D TV. “After CES it was clear some manufacturers were pushing hard on 3D and it was a case of manufacturers solving a problem that the consumer didn’t have,” Vandenbree said. In addition to packaging movies, manufacturers also have bundled 3D TVs with Blu-ray players and in the case of Sony, PlayStation 3.

TV inventory at some suppliers has increased in recent month as set sales slowed, but LG Electronics isn’t among them, Vandenbree said. LCD panels and glass suppliers have said much of the inventory is at TV assemblers. While LG Electronics increased its market share this year, it has been “cautious” about building too much inventory,” he said. LG’s market share growth was partly tied to its adding Wal-Mart as a retailer, company officials said. “We don’t have a barn load of inventory that we are trying to shove into retail as we understand some other folks are,” Vandenbree said.

The oversupply is likely to carry into the first quarter, possibly leading to price promotions in the runup to the Super Bowl as manufacturers try to clear inventory ahead of the release of new models, LG executives said. LG expects 32-to 47-inch LCD TVs to be among the top draws on Black Friday this month, and LG plans to heavily promote a selection of its major appliances, said James Fishler, senior vice president for go to market operations. “Every time we have a product, we have a sell-through plan, and we have to monitor that plan, and we try to be very, very consistent about that so our retailers don’t find themselves upside down,” Vandenbree said.

Meanwhile, LG has no plans to return either WHDI or WirelessHD to its products in 2011, Alessi said. LG dropped WirelessHD for a Wireless High-Definition Interface (WHDI) this year that it built into an optional adapter for LCD TVs. LG shipped three WirelessHD-equipped models in 2009 -- 55LHX 55-inch ($4,799), LH85 47-inch ($2,399) and 55-inch ($3,199) -- featuring SiBeam’s SB9122 receiver chip paired with a separate set-top box containing the SB9210 transmitter. The wireless change was driven by WHDI’s not needing line of sight to transmit content up to 100 feet in the 5-GHz spectrum. WirelessHD, which uses the 60-GHz band, can send signals up to 30 feet but can’t transmit through walls. The WHDI adapter ($349) attached to an HDMI input on the back of the set and had three HDMI 1.3 inputs. “We decided to step away, regroup and see how it goes for a year and we may consider it for 2012,” Alessi said. “Both technologies have pros and cons and the lack of 3D support was another factor.” WHDI adapters “kind of got lost” this year and “we were disappointed it didn’t get better support at retail and maybe we didn’t do a good enough job promoting it."

LG also has no plans for introducing OLED TVs in 2011, despite having sold a 15-inch model in Korea. It also demonstrated a 31-inch OLED panel at IFA in German in September. LG Display is investing in expanding OLED production in 2011, initially for cellphones and other mobile devices. “It’s a question of getting the value proposition right,” Alessi said. “It’s a gorgeous product, but it’s just so expensive. They're continuing development of it so by 2012 maybe we will start to see more viable screen sizes."

After participating in the mobile DTV trial in Washington, D.C., LG is winding down sales of its portable DTV/DVD player, a company spokesman said. The mobile DTV trial ended Oct. 30. LG has been selling the device through Amazon. LG’s inventory of the product is in the “single-digit thousands” of units, the spokesman said. “Ours isn’t widely available at retail because it’s classic chicken-and-egg situation, because there are not enough stations on the air yet,” the LG spokesman said. About 70 stations have the equipment needed for mobile DTV. LG also postponed introduction of a mobile DTV-capable cellphone for similar reasons.