Tech Hardware Supply Chain - Gazhoo

Bhavin Shah
(852) 2800-8538
bhavin.a.shah@jpmorgan.com
Asia Pacific Equity Research
20 April 2009
TV market snapshot
The TV market can be classified into two major categories, based on internal
mechanisms and display characteristics: CRT TVs and flat panel TVs. LCD TVs,
plasma TVs (PDP) and rear-projection TVs (RPTV) come under flat panel TVs.
We estimate that the global market for TV sets grew 3.4% to 200 million units in
2008. We believe the growth was driven by flat panel TVs at the expense of CRT
and rear-projection TVs. In 2008, shipments of LCD TVs surpassed CRT TVs, by
our estimates.
Table 75: Global TV market by units
Millions units, %
2003 2004 2005 2006 2007 2008E
CRT TV 141.7 148.1 135.5 119.2 99.4 79.6
Projection 5.3 5.7 5.4 4.8 2.7 0.9
CRT PJTV 4.3 4.0 2.6 1.4 0.5 0.4
MD PJTV 1.0 1.7 2.8 3.4 2.2 0.5
PDP 1.5 3.2 6.4 9.2 10.6 13.8
LCD TV 5.0 12.2 26.9 52.0 80.5 105.4
Total 154 169 174 185 193 200
Growth rate 6.1 10.2 3.0 6.3 4.3 3.4
% of total shipment
CRT 92.3 87.5 77.8 64.4 51.5 39.9
Projection 3.5 3.4 3.1 2.6 1.4 0.4
PDP 1.0 1.9 3.7 5.0 5.5 6.9
LCD 3.3 7.2 15.4 28.1 41.7 52.8
Total 100 100 100 100 100 100
Growth rate, Y/Y %
CRT 2 5 -9 -12 -17 -20
Projection 40 8 -5 -12 -44 -67
PDP 109 108 101 43 15 31
LCD 187 143 121 93 55 31
Total 6.1 10.2 3.0 6.3 4.3 3.4
Source: Company data, J.P. Morgan estimates.
Despite strong unit growth in flat panel TVs, the overall market revenue from TVs
had marginal growth in 2008, by our estimates. With regard to revenue contribution,
we estimate that in 2008 Flat panel TVs accounted for 88% of the total TV market
revenue; up only from 10% in 2003.
It is very clear that consumers are willing to pay more for flat panel TVs. In the chart
below, we compare CRT TV shipment in 2003 for different sizes at different ASPs
with flat panel TV shipment in 2008. We choose 2003 for CRT, because that was the
last year after which flat panel TV revenues started to become meaningful. While the
volume for a CRT TVs at price points of around $500 was ~30 million, similar
volume was achieved for 40-42 inch flat panel TVs being sold at almost twice that
price point. Volume for 30-32" flat panel TVs with price point of around $600 was
much larger at 40mn. Due to consumers’ willingness to spend more money on flat
panel TVs, the TV industry enjoyed CAGR revenue growth of 11.2% between 2002
and 2008, which we believe is greater compared to CAGR revenue growth TV
industry enjoyed in 1990s.
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