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TV Market Dip: LCD Price Slash Pushing Out Plasma, OLED Coming Next Year

By Matthew Lentini | Monday | 17/10/2011

The TV market is looking sluggish as we approach the end-of-year holiday season with economic pressure in Europe and the US taking its toll on TV demand.

Asia Pacific is slated for the highest growth rates in the TV market as global forecasts dip below earlier expectations according to research by DisplaySearch in its Quarterly Advanced Global TV Shipment and Forecast Report. Most of this growth is tipped toward India though as developed markets hit a snag in consumer demand.

Consumers are making more cautious decisions when nabbing a new screen and are "highly value-seeking," according to the report, and manufacturers are meeting this behaviour by dropping the premium on advanced features like 3D and IPTV integration.

LCDs and plasma screens are set to go head to head in 2012 as LCD TV prices fall quicker than plasma TV prices, narrowing the price gap and driving consumers closer to LCD. A 42-inch full HD plasma screen in mid-2010 was 32 percent cheaper than a similar-spec LCD screen, but that divide narrowed to 9 percent in mid-2011.

Newer display technologies like Organic Light-Emitting Diode (OLED) are set to make waves further down the track as they take a slice of the 40-inch plus pie in the coming years.

The company to watch is LG Display which owns over 2,000 OLED patents through Global OLED Technology (a company it created in 2009 when it bought the patents from Kodak).

LG has big plans for its new displays, with plans to invest nearly $3billion in mass-production of OLED and OEL displays from 2012 onwards. Early sales in 2012 will test the waters to see how the market reacts before a larger-scale roll-out of the TVs.

The biggest hurdle comes from the high initial asking price. Consumers are currently looking for the cheapest deal rather than the most premium product, and DisplaySearch's report projects OLED debut prices to sit at up to three times those of high-end LED-backlit LCD TVs which are set to dominate the market by 2014.

LCD shipments are on the rise, shifting from 192 million units in 2010 to 206 million this year, though the growth is smaller than earlier expectations of 211 million.

"LCD TVs account for more than 80% share of all global TV shipments. LCD TV supply chain participants—including panel makers, OEMs, and TV brands—have all lowered their outlook for 2011 demand, despite a recent drop in LCD panel prices. Long-term, we continue to forecast annual growth in demand for LCD TVs, although generally we expect less than 10% growth each year," said DisplaySearch Director of North America TV Research, Paul Gagnon.

LED-backlighting and 3D displays are keeping the prices of LCD screens stable as prices drop 7 percent year on year on a volume weighted basis. Revenues are predicted to start declining gradually from 2013 onwards for LCD screens after a slight peak in 2012.

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