But the slowdown will be temporary as the worldwide economy emerges from recession and new markets enter the initial stages of the flat panel and digital TV transition. Better-than-expected results in the first quarter of 2009 for developed markets, especially for LCD TVs, together with increased stimulus spending by governments, particularly in China, have improved the outlook for TV demand in 2009, the research firm said.
Developed markets are starting 2009 with strong growth and emerging markets are transitioning from CRT to LCD faster than expected, and the global TV market hurries along in the transition to flat panel technologies. DisplaySearch has increased 2009 LCD TV shipment forecast to 127 million units from 120 million units, a 21% growth over 2008 and a 63% share of global TV shipments. Although the 2009 LCD TV revenue outlook was increased to US$76 billion from US$66 billion, primarily based on rising LCD panel costs since April that will drive slower ASP erosion in the second half of 2009, LCD TV revenues are still projected to decline about 6% in 2009 due to price erosion and the strong shift in volume to discount retail channels, such as Walmart in the US. This is a much shallower decline than previously forecast due to faster growth of advanced technologies like 120/240Hz and LED backlight models.
"This is good news for global LCD TV revenues overall, but could have a negative impact on demand in developed markets, like North America where consumers are more sensitive to sale promotions and prices," noted Paul Gagnon, director of North America TV Research at DisplaySearch. "Still, emerging markets offer tremendous growth opportunity, even at current price levels, and the slower ASP declines shouldn't have a strong impact on rising demand."
The 2009 LCD TV forecast for China was increased to 23.6 million units from 18.8 million units as the China government fortified their rural home appliance purchase subsidy program and introduced additional incentives to consumers trading up from CRT to LCD in urban areas.
According to VP of TV market research Hisakazu Torii, "The shift to higher frame rates is critical to LCD TV manufacturers for increasing both performance and profitability, especially considering the rapid pace of commoditization in the category." The 120Hz frame rate models will account for 29% of LCD TV revenues worldwide in 2009, while 240Hz will grab about 5% of revenues. By 2013, 120Hz will account for 31% of LCD TV revenues, while 240Hz accounts for more than 20%."
Plasma (PDP) TV is expected to fall about 2% on year to 14.1 million units in 2009 after a strong 28% growth in 2008. This outlook is down slightly from DisplaySearch's previous forecast as a result of increased consumer preference overall for sub-40-inch screen sizes amid heightened price-sensitivity during the recession. Penetration of 1080p continues to rise, accounting for 32% of PDP TV shipments in 2009, but quickly accelerating to more than 50% in 2010 and 80% by 2013.