Past Editions of “LCD TV Matters” - Veritas et Visus

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LCD TV Association LCD TV Matters May 2012 28
LCD TV Association LCD TV Matters May 2012 Can feature-rich sets save the flat-panel TV market? Sophisticated products drive rare rebound in US pricing 29 by Lisa Hatamiya Lisa Hatamiya is the researcher for television and retail services at IHS iSuppli. Her responsibiliites include tracking and analyzing market prices, specifications, and consumer preference. She also monitors market trends as well as monitoring supply and demand. Previously, Hatamiya participated in Morgan Stanley Smith Barney’s Financial Training Program and interned at Farmers Insurance Group. Hatamiya graduated from the University of California Davis with a Bachelor of Arts in Economics and a minor in Communications. A rare, sustained increase in average selling prices in the U.S. flat panel television market in early 2012 may indicate that the future of the global TV business lies in offering sets with more sophisticated features, rather than continuing to battle over pricing, according to information and analysis analytics provider IHS. High-end television features like Internet connectivity and light-emitting diode (LED) backlight technology allowed U.S. flat-panel TV prices to climb 11.4 percent during the period from December 2011 through April 2012. In April, average pricing for U.S. flat-panel televisions including liquid crystal display (LCD) and plasma sets reached $1,248, up from $1,119 in December, as presented in the figure below. Feature-rich TV models are responsible for the ongoing surge in prices, especially Internet connectivity and LEDbacklighting. TV manufacturers and retailers are charging a premium for these features, boosting their pricing and protecting their revenue. This represents a shift in strategy among brands and retailers to hold the line on pricing and to encourage consumers to buy more expensive sets. After riding high during the flat-panel replacement wave of the 2000s, the growth of television unit shipments has slowed, impacting market revenue. Having frequently risen by double-digit percentages in the mid to late 2000s, global television unit shipment growth has slowed to low single-digit percentages. Going forward, TV sellers are expected to put a greater emphasis on advanced features. Combined with Apple’s capability to manage the supply chain to obtain optimal pricing, the company should be product the set at a competitive cost. The Apple television would also likely integrate the electronics from Apple TV set-top box into the television chassis. A critical feature of the Apple television will be the user interface. Press reports indicate Apple plans to use the Siri voice recognition software first employed in the iPhone 4S smartphone. This will bring revolutionary ease of use to the set, allowing users to eschew complex, easy-to-lose remote controls and instead employ voice commands using natural language. A farewell to price wars: The current conditions in the U.S. flat-panel market represent a major departure from 2011 and previous years, which were marked by aggressive pricing competition. Brands and sellers in 2012 are working together to keep money flowing into the industry. The industry is able to accomplish this by making consumers pay for features that they want, and by excluding features that buyers are not willing to pay for. Such an approach has meant implementation of different pricing strategies from brands and retailers as well controlled inventory into distribution channels—a strategy that has also successfully preventing prices from sliding this year, IHS iSuppli believes.
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Past Editions of “LCD TV Matters” - Veritas et Visus

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