Consumers Now Expect TVs to Be Connected, Says IHS iSuppli Report

For the first time since their introduction, LED-backlit TVs, the step-up category of flat-panel TVs, became the dominant technology in Q3 2011, moving past models using cold-cathode fluorescent lamps (CCFL), said IHS iSuppli. Shipments of LED-lit TVs totaled 4.09 million in Q3, compared with 3.85 million units for CCFL, IHS said. LEDs represented 44 percent of flat-panel TV shipments in Q3, compared with 41 percent for CCFL, with the remaining 15 percent of shipments claimed by plasma TVs, which don’t use backlights, IHS said.

Thinner panels, better picture quality and lower power consumption are driving the surge in LED-lit LCD TV sales, which will continue to account for a bigger piece of the overall flat-panel market, IHS said. CCFL LCD TV shipments will continue to decline and by Q2 2012 will reach 1.84 million shipments, compared with LED shipments of 5.56 million units, IHS said. “LED-backlit TV shipments are expected to see rapid double-digit growth in the coming years as brands focus on marketing this feature and making LED-based models standard in their lineup,” said Lisa Hatamiya, displays researcher for IHS. Aggressive pricing will also continue to help LEDs’ ascension in the market, she said.

Some categories will be better penetrated than others, Hatamiya said. LED penetration is already widespread in the 50-inch-and-larger group, but penetration is only 15 percent in the 30-34-inch segment, she said, attributing the difference to the “large $20 differential between LED and CCFL panels in this size group.” The 42-44-inch category will account for the most growth for LED TVs in projections for 2011, with a surge of 230 percent expected depending on economic conditions. “Should the economy experience a downturn in the months to come, the large-sized LED TVs will be the ones most affected,” Hatamiya said, “given that smaller-sized sets and their less costly price tags likely will be more appealing in a slower economy."

Strong plasma shipments are being driven by competitive pricing, which is lower than that of LCD counterparts, IHS said. Most plasma sets also have higher specs that boost their appeal, including 1080p resolution, 600 Hz refresh rates, and 3D, it said. Sets sized 50 to 54 inches appear to be most in demand because of their price advantage over similarly sized LCD models, IHS said, with average price for a plasma TV in October at $1,214 compared with $2,085 for an equivalent-sized LCD set. Plasma shipments will slip 1 percent for 2011, compared to a 25 percent growth rate in 2010, IHS said, and negative growth is projected from 2012 onward.

New features are enticing American consumers to new TVs, but to varying degrees, said Hatamiya. Internet connectivity is no longer considered a luxury or optional feature but one expected by consumers. Not all consumers are willing to pay for 120 Hz refresh rates, although the feature’s contribution to a smoother overall TV picture is increasingly being understood, IHS said.

3D remains “slow on the uptake,” with consumers remaining skeptical and unwilling to pay for the sets’ higher prices even as technology improves and library of 3D movie content gradually expands, IHS said.

Combined U.S. flat-panel TV shipments amounted to 9.37 million units in Q3 2011, up 7 percent from 8.75 million units in Q2, IHS said. Q3 shipments broke out into 7.94 million units for LCD and 1.43 million units for plasma. The holiday season was expected to spur demand, but discounted pricing and the volatile economy were factors that could affect year-end shipment totals, IHS said.