Digital Display Technology - Consumer Electronics Association

IT’S THE ECONOMYAs we just noted, the prices of most plasma and otherDDT sets likely will remain high for the foreseeable future.However, the United States and much of the world isundergoing an economic recession, and it’s unclear whenthe recovery will occur. Concerned about plunging stockprices and devalued 401k accounts, many consumers areless likely to make a big-ticket purchase. DTV sales are up,but that’s because many sets now can be purchased foraround $2,000. If the economy does not turn around soon,it could have an impact on DDT sales.A TFCInfo study, publishedin July 2002, found that 50 percent of affluent consumerswould buy a plasma TV if the price were $4,999 orlower. However, when the same question was asked of allconsumers, 50 percent said they would only buy one if theprice dropped to under $3,000.However, some disagree that the economy is having animpact on new sales. Mike Piehl, a plasma line product managerfor NEC, says that plasma TV has been a rare “brightspot” during the down times.“Even after September 11th,our sales haven’t missed a beat,” he says.“The newness ofthe technology is still very attractive.”prices. But, by 2008, the group says LCD will accountfor just 53 percent of shipments and 35 percent ofrevenues. Plasma shipments will jump to 34 percentand it will account for 56 percent of all flat panel TVrevenue. Strategy Analytics agrees that Japan is theworld leader in flat panel sales, but says that willchange in the next few years.But, outside of the numbers, there is growing evidence thatthe industry is taking the business more seriously. SeveralTV makers this year said they were increasing productionof DDT sets. Perhaps accordingly, Circuit City, the retailchain that is often a weather vane on emerging technologies,said in February 2002 that it would re-organize itsvideo departments to “better display plasma and LCD TVs.”Later in the year, Circuit City said it would drop VHS videotapesfrom its shelves and boost its DVD line, a policy thatwas soon adopted by other specialty retailers.And Searsannounced in August that it was adding its “expensive” lineup of plasma TVs to more than 650 stores.PROJECTED FLAT PANEL TVSTHE FORECASTDespite the barriers, the industries—and analysts—are bullishon the potential of digital display technology. For instance:■■■DisplaySearch, a research group specializing in DDT,says it expects annual LCD TV sales to reach 14 millionunits, or five percent of all TVs, by 2006. (Lessthan 300,000 LCD TVs were sold in 2001.) The companyprojects LCD revenue to jump from $1.4 billionin 2002 to $13.8 billion in 2006 worldwide.DisplaySearch, however, says 80 percent of LCD salesthus far have been in Japan where houses are smallerand thin sets are more appreciated.The industry’schallenge is to persuade Americans that a flat-panelTV would improve the overall décor of their homes.Interestingly, marketing for high-end televisions is targetedusually at the male. But a flat-panel set couldappeal to women looking for ways to better organizethe living room;TV makers could do well by focusingtheir DDT advertising campaigns on both sexes.The Japan Electronics and Information TechnologyIndustries Association projects that worldwide plasmadisplay sales will hit 3.35 million by 2006, almost 20times higher than in 2001.The group says one millionof those sales will come from Japan with 900,000from the United States.Strategy Analytics forecasts that flat panel TV saleswill jump from 2.2 million in 2002 to 37.8 million by2008.The research group says LCD sets now accountfor 80 percent of units shipped, largely due to lowerSource: Strategy Analytics, 2001.“More Sears customers are investing increasingly in topqualityhome entertainment because Americans are spendingmore time at home with their families with the recentdecline in personal travel,” said Ray Brown, vice presidentand general manager of Sears’ consumer electronics business.“Theconvergence of these two trends…makes thisthe ideal time to introduce the largest selection amongnational retailers of flat-panel plasma and LCD brands.”In addition, there has been a slight increase in media coverageof flat-panel and LCD sets.The coverage nowhereapproximates the space given to digital TV, but it’s a startand it will help generate greater interest among consumers.THE PLAYERSAs a whole, the consumer electronics industry is devotingmore resources to manufacturing and selling LCD and plasmasets. However, there are some clear leaders in the field.A year ago, DisplaySearch reported that Sharp is dominatingthe LCD market with 86 percent of the worldwide market6 OCTOBER 2002 5 Technologies to Watch