Growing economical trend: Cost-effectiveness to become priority in LCD TV and monitor in 2011

TAIWAN: According to WitsView, even though the global economy has been gradually under recovery since 2010, its reviving and growing pace is slower than expected. Amid the pressure of the squeezed income and consumption, consumers take a relatively conservative attitude toward spending, which extends the replacement of old models with the new ones.

In addition, the booming smartphones and the tablet devices, rolled out this year, gobble up consumers’ wallet, leading to the slow growth in terms of the worldwide IT or TV market scale. Thus, amid the sluggish economy, differentiating the products could spur the demand; in addition, most products will be at a more affordable price in 2011. In other words, the majority of consumers favor the more economical products in the slow economy instead of the ones with high specification and high price tag in the flourished period.

According to WitsView, the projection for the global LCD TV shipments is around 180 million units, increasing by 25 percent YoY, which is lower than the 40 percent YoY growth in 2009. The huge price gap between LED TV and CCFL counterpart could not drive the LCD TV sales effectively even with the advertising hype of LED TV this year.

Additionally, in 1H10, TV brand vendors’ optimistic attitude toward inventory replenishment led to the inventory problem in LED TVs. Hence, the price promotion was launched to boost the weak demand in 3Q10. As a result, consumers are not able to perceive the substantial discount in the current hot season in the US and Europe, leading to the weaker sales performance this year.

Looking into 2011, WitsView points out that the LED TV at a more affordable price will become the lead in the growth of LCD TV demand in 2011, and it will certainly remain the hot topic in the market in addition to other potential TV products such as 3D TV and smart TV.
However, limited to the high cost and the schedule of development, these potential products have not been able to troop into the TV market. Therefore, WitsView forecasts that the worldwide LCD TV shipments will grow by 22 percent YoY to around 220 million units in 2010.

In terms of LCD monitor, the condition is even harsher than that of LCD TV. Based on WitsView’s estimate, the worldwide LCD monitor shipments will grow by 6 percent YoY conservatively to around 180 million units in 2011.

The price is easily fluctuated with the panel prices, coupled by its high price-sensitiveness, brand vendors have to absorb the price loss themselves, so they must be stricter in the inventory control and adjustment in order to avoid risk. Thus, since there is no evident growth momentum in the market, lowering the cost of LCD monitor will still be the top priority.