CEA Projects Ultra HD TV Will Have 5 Percent of U.S. TV Market by 2016
SAN ANTONIO -- While flat-panel TV price drops have leveled off, few at the Home Technology Specialists of America spring meeting were sanguine about CEA projections that average wholesale prices of Ultra HD TVs would break the $5,000 barrier in three years. Even Kerry Moyer, CEA senior director-retail membership, was doubtful prices would hold, telling attendees, “I think it will happen much sooner.” With a retail background himself, Moyer said the industry tends to “shoot ourselves in the foot.” CEA projects Ultra HD TV sales to reach 1.4 million units by 2016, when the category will have reached 5 percent of total U.S. TV market penetration. Some 23,000 Ultra HD sets are projected to ship this year, he said.The average wholesale price of a flat-panel TV in 2012 was $536, up slightly from an average of $515 in 2011. The trend has translated to retail due to “successful UPP and MAP programs” vendors have put in place, Moyer said. Large-screen TVs in the 50-inch and above category are showing the most growth and are projected to top 7 million units in 2016, according to CEA figures. Sets above 60 inches are slated to be 11 percent of TV shipments from 2014-2016, according to CEA.
LCD TV unit volume will peak this year at 30.4 million units, slipping by a fraction in 2014 before falling to 29.5 million in 2015 and 27.8 million by 2016, CEA said. That raises the question of what will replace LCD as it falls, Moyer said, noting various new display technologies including OLED on the horizon.
Across the CE industry, product shipments are forecast to grow 2.7 percent in revenue this year, including tablets and smartphones, which are the industry’s only significant growth drivers, Moyer said. Excluding tablets and smartphones, expected to grow by 45 and 20 percent, the CE industry will decline this year by 3.5 percent in dollar volume, according to CEA figures. Gaming hardware is expected to fall by 17 percent due to gaming moving online, he said.
In the economy at large, Moyer noted that strength in sales of durable goods could be a headwind for consumer CE spending. Spending on technology as a percentage of durable goods sales peaked in 2010 at 17.6 percent and dipped to 16.5 percent last year. Moyer noted recent reports of a surge in sales of automobiles and appliances due to pent-up demand following the recession. Despite the competition for consumer dollars, he said, “We think technology will come back in and fill whatever gap was left by that.” Moyer said there’s still a “huge opportunity” to sell 3D TV, connected TV and “ultimately” Ultra HD.
While portable media players continue to decline in sales, audio separates are projected to grow slightly from $1.52 billion this year to $1.55 billion in 2015, according to CEA. Multi-room audio system volume is projected to jump from $580 million this year to $702 million in 2015, CEA data show.
Two-channel receivers are making a surprising comeback, Moyer said, although receiver manufacturers we spoke to couldn’t verify the trend. Sales of receivers “with no surround sound at all” were expected to grow by 76 percent for 2012, but at modest numbers, he said. Keith Haas, director of sales for Onkyo USA brands, said there aren’t many companies selling stereo receivers, with more and more leaving the market. Luke Germain, president of Tune Street, Great Barrington, Mass., said his store today looks for a “new separates” approach combining a streaming media product such a Sonos or Apple TV with an amplifier solution. “You get more value with a nice-sounding amp,” he said.
According to CEA, last year receivers with satellite radio tuners were projected to plummet by 53 percent and those with HD Radio tuners were slated to drop by 23 percent. Receivers with Internet connectivity and streaming were expected to grow by 45 percent for 2012, and sales of receivers with HDMI 1.4 connectors were positioned for 54 percent growth, CEA said. Data aren’t final for 2012, he noted.