After a weak performance from the global TV set market in 2013 – with revenues and shipments down 4% and 2.6% respectively – the segment is expected to return to growth in 2014, according to a new strategic report from Futuresource Consulting.
“Flat panel saturation in developed markets has resulted in oversupply and has been exerting downward pressure on vendor profitability,” says Jack Wetherill, Senior Market Analyst, Futuresource Consulting. “Moreover, the stimulus provided by the switchover from analogue to digital in the years up to 2012 did not carry over into 2013.
“However, in amongst last year’s global market weakening – with TV revenues down to $104 billion at trade – we did see pockets of profit. The Chinese market grew strongly in 2013 after an underwhelming 2012, to reach 47 million units, with a government subsidy programme bolstering a particularly strong H1. Latin America and MEA also enjoyed growth, with flat panel volumes up 3% and 6% respectively.
“As we progress through 2014 we’re going to see the global TV market grow by around 1% to exceed 230 million units, with the majority of growth being derived from Latin America, Middle East & Africa and emerging Asia Pacific. Value will be driven even higher, with forecasts of nearly 2%, on track to exceed $105 billion.”
The Rise of 4K
To generate higher margins, panel makers and TV vendors are beginning to push new generation 4K TV sets, and Futuresource forecasts show that 4K sets will account for 5% of the global TV market this year, rising to 42% by 2018. Besides attractive pricing, the industry is hoping that the ability of many of the sets to upscale from HD will encourage consumers to buy the sets in advance of the content industry gearing up for widespread 4K content capture and distribution.
The larger screen size segments are now expected to migrate rapidly to 4K, predominantly the result of upstream competitive pressures and efficiencies in panel manufacturing.
Connected TV sets continue to grow their share of the TV market, accounting for 39% of global volumes last year, which will rise to 87% by 2018, with vendors integrating the technology further into their product line-ups in order to maximise consumer uptake of the associated connected services.
Riding the Curve
In an additional attempt to promote sales and higher margins, a number of TV vendors have introduced curved sets to the market, promoting them as providing a more immersive experience and reducing reflection and glare.
“While curved sets may form a niche market in larger screen sizes, it remains to be seen to what extent consumers will be convinced by the benefits of curved sets, particularly in the mid to low screen size bracket,” says William Pratt, Research Analyst, Futuresource Consulting.
Winners and Losers
“Samsung’s position as the top global TV vendor was further strengthened in 2013 as it continued to lead on pricing and feature inclusion,” says Pratt. “Alongside Sony, Samsung has also taken an early lead in the 4K market.
“China’s domestic brands continue to push into international markets and we anticipate this expansion to become more rapid as the Chinese domestic market declines. Conversely, the majority of Japanese brands lost share after another year of weak domestic demand and difficulty competing with the prices from the leading Korean brands.”
Looking beyond 2014, Futuresource forecasts global TV market volumes to grow at 3.3% CAAGR to 2018, driven mostly by growing flat panel demand from emerging regions such as Latin America, India and developing markets within Asia Pacific. Modest growth in demand is forecast for developed markets from 2015, due to the natural replacement cycle of TV sets bought during the flat panel boom.