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Day 4 - IFA International

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  • September
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MARKET & TE CHNOLOGY

MARKET & TE CHNOLOGY TRENDS THE SECOND QUARTER TV SALES RESULTS: DEFYING THE PROPHETS OF DOOM… By Richard Barnes DisplaySearch’s latest research into TV shipments this year seems to occupy a different world from that of the gloomy news reports. Brisk sales of Flat Panel TV sets continue in all regions. Global TV shipments improved a robust 11% Y/Y to 47.5M units in Q2’08, which was up 3% Q/Q, with better than expected shipment growth in North America according to the latest figures from DisplaySearch’s Quarterly Global TV Shipment and Forecast Report. LCD TV was once again a hot technology, rising 47% year on year to 23.7M units. However, Plasma TV exhibited even stronger growth, rising 52% Y/Y to 3.4M units, thanks largely to the reintroduction of 32” into the North American market and wider availability of 1080p models. Globally, flat panel TV share rose from 52% in Q1’08 to 57% in Q2’08 as LCD regained unit share lead from CRT, climbing to nearly 50% of all TV shipments worldwide. North America enjoyed particularly strong growth in Q2 with total TV shipments surging 28% Y/Y after just 5% Y/Y growth in Q1’08 and negative growth during most of 2007. The strong shipments in North America reflect introduction of new, lower-cost, flat panel TV models to the US market by top-tier brands in the latter part of the quarter and a consumer who was very receptive to these lower price points. China has not had the predicted Flat Panel boom. It has to be concluded that the Chinese consumer is just not quite ready to pay the premium being demanded at this time over CRT, although the growth of LCD and Plasma’s penetration remains steady. LCD TV took share from other technologies in all regions except Japan, rising to a record 49.8% unit share. Developed regions already have very high levels of LCD TV share with the greatest penetration being in Western Europe at 87%. A distaste in Europe for the very largest screen sizes accounts for this difference. Western Europe has had a solid year with shipments up 10% over the second quarter of 2007. Consi - dering that this is a mature market with Flat Panels at 98% of shipments, this is a remarkable result and shows the fundamental desirability of televisions to consumers. Eastern Europe has been a remarkable market this year, with sales booming. On top of rapid Flat Panel TV growth (at an annual level of 69%) while CRT TV sales have remained almost stable. It appears as though the effect of CRT price falls has been to place them within reach of less affluent consumers. With strong economics in Eastern Europe we expect that this boom will have some more time to play out and that rising living standards will provide a firmer foundation than the boom after the destruction of the Berlin Wall in 1989. SHIPMENTS IN EUROPE 12,000 10,000 8,000 6,000 4,000 2,000 0 Western Europe Shipments Q1 Q2 Q3 Q4 Q1 Q2 CRT 2007 LCD PDP 2008 5,000 4,000 3,000 2,000 1,000 0 What is interesting to note is that the speed of the transition to Flat Panel in Eastern Europe has been as rapid as in Japan or Western Europe. Once a ‘sweet spot’ price has been achieved, it appears as though the market switches at the same rate, regardless of region. We expect that the transition to Flat Panel will be complete in Eastern Europe by early 2011. Considering the future it is reasonable to expect that televisions cannot be immune to difficult economic conditions. However, in most parts of Europe, TV is considered to be an essential part of life, and few households would fail to replace the main set if it stopped working. While overall shipment numbers can be expected to remain reasonably firm, the risk is more likely to be in consumers replacing sets with lower specification or smaller models that cost less. However, it is also important to remember that the recent growth in the markets seems to show that consumers are prepared to prioritise Flat Panel TVs over a lot of other discretionary purchases. Consumers may well respond to tough times by forgoing a holiday or delaying replacement of a car, but still buy a Flat Panel TV. For further research reports visit : www.displaysearch.com Eastern Europe Shipments Q1 Q2 Q3 Q4 Q1 Q2 CRT 2007 LCD PDP 2008 Source : DisplaySearch IFA International • Monday, 1 st September 2008 www.ifa-international.org 13

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