First Revenue Decline for LCD TVs From Eroding ASPs Coming in 2011, Predicts DisplaySearch

Shipment growth of 31 percent for LCD TV in 2010 was “lower than expected,” resulting in increased inventory Q3, and that led to “vigorous price erosion” Q4, said DisplaySearch. LCD TV shipments will rise from 190 million in 2010 to 215 million in 2011, according to forecasts, but erosion in average selling prices will lead to the first-ever revenue decline in the LCD TV category, the firm said. Worldwide LCD TV shipments are expected to slow this year to 13 percent, it said.

Growth in plasma TV sales helped raise overall TV shipments to 247 million, 17 percent above 2009, DisplaySearch said. Plasma sales, which had declined from 2008 to 2009, moved back to growth, with shipments estimated as having exceeded 18 million units in 2010, up 28 percent. According to DisplaySearch, plasma demand was “very robust” in 2010 because of “strong value” and plasma TVs’ “maintaining” price declines.

Sales of 3D TVs “will likely disappoint many brands and retailers” at roughly 3 million units shipped around the world, the report said.

North America remains a “tough market” for TV sales, with total shipments inching up just 0.4 percent through the first three quarters of 2010, according to Paul Gagnon, DisplaySearch director of North America TV Research. He said unemployment remains high, consumers continue to be sensitive to price, and budget-conscious consumers “have been surprised by limited price declines” influenced by a mix of advanced TV technologies, including LED backlights, 3D and Internet connectivity. Average TV prices in North America are expected to fall 6 percent year-over-year in 2010, compared with a 22 percent decline in 2009, he said.

LED backlights, a key trend for 2010, will push to 20 percent penetration globally as a result of lower prices, especially in the second half of Q2, DisplaySearch said. In 2011, LED-backlit models are expected to account for most LCD TV shipments, as manufacturers continue to shift from fluorescent backlights. Rapid decreases in the premium for LED-based TVs will spur the transition, it said. Premiums for LED-based models, 100 percent during the first half of 2010, will drop below 50 percent in 2011, the firm said. In some sizes and frame rates, the premium will fall to 20 percent, it said.