Global TV market contracts for second straight year in 2013

Thursday, March 13th, 2014
IHS Technology logo

China, Asia-Pacific and Eastern Europe Suffer Rare Decline

EL SEGUNDO, Calif. — The global television market shrank last year for the second year in a row after total shipments declined by 6 percent from already soft 2012 levels, accompanied this time by a rare deceleration in the liquid-crystal display (LCD) TV space in China, Asia-Pacific and Eastern Europe, according to a new report from IHS Technology (NYSE: IHS).

Shipments worldwide of televisions in 2013 amounted to 225.1 million units, down sharply from 238.3 million in 2012. It was the second straight year of contraction after a 7 percent loss in 2012, contrasting with the market’s big 11 percent surge in 2010 and a more modest 1 percent uptick in 2011, as shown in the attached figure.

“The global TV market continues to be in transition following a golden period of tremendous growth from 2009 to 2011,” said Jusy Hong, principal analyst for consumer devices at IHS. “Television shipments were down again in 2013 just like in 2012, but an unusual development was the slow market last year in China, Asia-Pacific and Eastern Europe—until recently among the brighter spots for the industry.”

Adding to the market’s woes, Hong added, cash-strapped consumers in North America and Western Europe showed little appetite to buy new TVs, especially as these territories are nearly saturated from flat-panel sets during the last major upgrade of the growth years.

These findings can be found in the report, “Worldwide TV Tracker – Q1 2014,” from the Consumer Electronics service and Consumer Devices research area of IHS.

China and Asia-Pacific both slow down

China suffered a noteworthy reversal during the third and fourth quarters of 2013 as the country’s LCD TV market declined in those quarters compared to the same three-month periods a year before in 2012—the first time this has happened. New growth in the China TV market is increasingly hard to come by, and an expired subsidy program provided by Beijing for new appliances has removed a previously powerful incentive for consumers to make new TV purchases.

All told, LCD TV shipments in China during the third quarter of 2013 fell to 13.0 million units, down from 14.0 million a year earlier. Fourth-quarter LCD TV volume declined similarly to 14.4 million, compared to 14.5 million from a year earlier. Still, overall LCD TV shipments to China for last year rose from 2012, thanks mainly to a strong first half.

For Asia-Pacific, LCD TV shipments last year amounted to 23.8 million, down from 25.4 million in 2012, with choices for cheaper-priced sets fast disappearing from the region’s market. Not only have manufacturers ended production of Cathode Ray Tube (CRT) televisions that had been the most affordable for consumers in the area, but brands have also pulled back from older-generation LCD TVs and plasmas because of vanishing profit margins. With light-emitting-diode (LED) sets still beyond the reach of many, TV demand in Asia-Pacific plummeted last year and continues to remain on a holding pattern, even as consumers hope for prices to come down, Hong noted.

Markets remain soft in the West as well

For North America and Western Europe, once the most powerful engines of the global television industry, the weak state of the market renewed disappointment. Overall TV shipments in 2013 for North America fell 9 percent on the year, while Western Europe showed an annual loss of 4 percent.

The TV market for both regions now consists entirely of LCD TVs and plasma sets, absent the analog, tube-type televisions that can still be found in other territorial markets, including the Middle-East-Africa, Latin America and Asia-Pacific.

Meanwhile in Eastern Europe, LCD TV shipments were off last year by 14 percent, echoing financial troubles in the European continent. Also, TV vendors had been less enthusiastic with their promotions in the region after suffering lower profits, due in part to the high exchange rates between the euro and Asian currencies like the Japanese yen and the South Korean won.

Prospects improve; OLEDs will help growth

Despite the sobering numbers for last year, worldwide TV shipments are projected to improve. The developed markets of North America, Western Europe and Japan will stabilize in the coming years, and no large yearly decreases like those of last year are forecast for the time being, Hong said. At the same time, significant growth can be expected from China, the rest of Asia-Pacific, Latin America and the Middle East-Africa markets.

Latin America, in particular, will enjoy a surge for many reasons, including projected economic growth, the FIFA World Cup soccer championship later this year, the analog-to-digital changeover in 2015, and the Summer Olympics in 2016.

Worldwide television shipment totals will also start climbing this year because of the new active-matrix organic light-emitting diode (AMOLED) sets entering the market, making their appearance at retail in perceptible volume for the first time. Featuring thinner profiles and higher contrast ratios than the current crop of LED-backlit LCD TVs, OLED TVs will see shipments grow from an initial low starting base to some 8.1 million units by 2018.