According to research from The Diffusion Group (TDG), short-term demand for 4K/Ultra-HD televisions is hindered by two simple but structurally important fundamentals: a widespread lack of awareness among consumers and a marked sensitivity to the costs of these advanced sets.
TDG research indicates that more than eight in ten adult broadband users have never heard of or are unfamiliar with 4K/Ultra-HD televisions – hardly a favorable environment for those OEMs looking to grow unit sales. According to TDG President Michael Greeson, “The industry is counting on 4K/UHD to be the solution for slow television sales and declining unit prices.”
All major TV OEMs have 4K/UHD sets in market, with prices generally ranging from $1,500 on the low end, to as much as $10,000 on the high end. Unfortunately, even among those familiar with the technology, TDG’s research suggests that prices are still too expensive for many consumers.
At a retail price of $1,499 – the midpoint of the three prices evaluated – only 6% of adult broadband users are moderately or highly likely to purchase a 4K/UHD TV. “This explicitly quantifies just how poor the demand for 4K/UHD televisions actually is,” explains Greeson, “and clearly demonstrates that current prices are too high to stimulate new sales.”
To illustrate how rapidly this demand evaporates relative to price, only 3% of adult broadband users are moderately or highly likely to purchase a new 4K/UHD set at $1,999 a unit, a modest increase in price of $500 that results in a 50% decline in demand at $1,499.
“This is not to suggest that price is the only variable at play in the decision not to purchase a new 4K/UHD television,” Greeson adds. “Nonetheless, it is two-to-one the primary reason cited by those unlikely to purchase a new 4K/UHD set. The next closest reason for a lack of interest was that non-buyers ‘were perfectly comfortable with the televisions they currently use,’ cited by 26% of this same segment.”