Consumers Start Buying 3D Televisions--but Challenges Loom

Tuesday, May 25th, 2010
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Although consumers have started to buy 3-D TVs, a number of challenges–including standardization, content availability and interoperability–must be resolved before the new television technology can take off, according to iSuppli Corp.

Worldwide shipments of 3-D TVs–introduced to the market for the first time in March–are expected to reach 4.2 million units in 2010, thanks to increasing traction and acceptance from enthusiastic early adopters. Global 3-D TV shipments will then triple to 12.9 million units in 2011 and then more than double to 27.4 million units in 2012.

Millions of Units: 2010-2015

In 2015, 3D TV shipments will reach 78.1 million units, rising at a vigorous Compound Annual Growth Rate (CAGR) of 80.2 percent from 2010.

Among U.S. consumers who purchased a new television in the first quarter of 2010, 4 percent indicated they were acquiring one that was 3-D capable, with 60 percent buying a 3-D LCD-TV and the remaining 40 percent preferring a 3-D plasma set, iSuppli figures show. As of April, 26 television models featured 3-D capability, compared to 23 the previous month.

The majority of 3-D TV sales in 2010 will occur in the mature television regions of the United States, Japan, and Western Europe, where sizable markets exist for upgrading or replacing older, non-3-D sets. Other countries that have rolled out 3-D trials include South Korea and Australia.

Despite such an apparent strong showing, 3-D TVs occupy only a small portion of the overall television market. Shipments of all types of LCD-TVs are expected to hit 170 million this year, while shipments of LED backlit sets–the LCD-TV submarket employing light emitting diodes as backlight–will reach only 26 million globally in 2010.

“Although robust growth of 3-D television sales appears to be assured during the next few years, mass consumer acceptance will not come until three critical issues are resolved concerning standardization, content availability and interoperability of the 3-D glasses used to view the sets,” said Riddhi Patel, principal analyst for television systems at iSuppli.

Standards and Content Challenges Arise

In the case of standards, the Blu-ray standard for 3-D TV establishing 1080p 3-D to each eye was set in 2009.

However, other standards still being worked out to ensure a successful rollout, including HDMI 1.4 for a variety of 3-D formats, SMPTE for 60 frames-per-second resolution, CEA for 3-D glasses and SCTE for 3-D content over cable.

Content is also a critical driver. Although consumers will expect quality similar to the blockbuster movie Avatar, achieving an equivalent immersive experience will depend on content availability, among other factors.

Cognizant of this fact, content providers and broadcasters alike are pooling their efforts to develop 3-D content availability and service plans. Already, ESPN has declared its plans to launch the world’s first 3-D network, while Walt Disney Co. and Sony Corp. both have announced 3-D Blu-ray title releases for 2010.

Through 3-D Glasses, Darkly

A third issue concerns the use of 3-D glasses or eyewear. 3-D glasses are among the most common 3-D TV bundles preferred by consumers, aside from 3-D Blu-ray players and 3-D Blu-ray movies.

While television manufacturers might throw in one or even two pairs of 3-D glasses to sweeten a 3-D TV purchase, additional glasses to accommodate more viewers–either other family members or guests to share the 3-D viewing experience–could be expensive. Furthermore, there is no guarantee that 3-D glasses will be interoperable among brands–that 3-D eyewear bundled or purchased with a particular TV will work with another.

Technology for watching 3-D TV without glasses is at least several years away, analysts say.

Concern also has been expressed about potential health hazards posed by viewing 3-D TV content. Samsung Electronics Co. Ltd. has cautioned its Australian customers, for instance, about potential dizziness, motion sickness and disorientation.

Likewise, a research group at the University of California in Berkeley has confirmed the phenomenon of vergence-accommodation conflict, which can lead to fatigue, eye strain and headache. The issue results from the disparity between where the viewers’ eyes focus on the screen and where in the 3-D image the viewers believe they are looking.

Overall, standards will play a key role in promoting increased adoption of 3-D TV in the consumer space, iSuppli believes. Because the 3-D value chain from content creation to content consumption is a complex and multilayered system, standards are needed to ensure interoperability, reduce risks in product planning and foster innovation. A lack of standards, on the other hand, will create substantial uncertainty throughout the value chain, hinder 3-D product development and discourage consumer adoption.