Samsung is moving into the "low-end, large-area" display market by introducing three slim-type DLP TVs, in the 40-, 50- and 60-inch range. "Low-end, large- area displays?" What’s going on here? What about all the marketing hype about super-large 70-inch MDTVs at the high end, with full-HD (1080p) capability? Well, given today’s market realities, Samsung, and also Daewoo, may have correctly concluded that the future for MDTV technology is in the low-end, large-area segment of the DTV market. Let me explain why.

Steve Sechrist
Senior Analyst and Editor
of Projection Monthly &
Microdisplay Report

MDTV manufacturers are facing ever-cheaper flat displays with much more appealing aesthetics (relatively large, thin and flat) coupled with display features that MDTVs can’t match (brightness, contrast and off-axis viewing). They are watching market share erode as flat displays grab the lion’s share of the global DTV market.

Indeed, 4Q numbers from leading US retailer Best Buy illustrate the point quite well. The company reported that robust sales of, among other things, flat-panel TVs propelled Best Buy to a 13% increase in 4Q profits. For BestBuy, flat-panel TVs experienced a triple-digit comparable-store sales gain as higher volumes and increased screen sizes more than offset the impact of declining prices. Total TV comparable-store sales grew in the solid double digits as flat-panel TV growth was partially offset by declines in tube and projection TVs.

Well, that’s not the whole story. According to recent numbers from DisplaySearch MD-RPTV revenues rose 49% Q/Q and 30% Y/Y to $2.3B, with ASPs flat Q/Q and down 14% Y/Y to $2,419. While North America remained the dominant region for MDTVs overall, with 87% worldwide market share, it’s the sales in the various sizes that’s interesting. MDTV shipments of 40- to 44-inch models were up 71% despite the increased price competition from LCD- and PDP-TVs. The larger 60-inch+ shipments rose 32%, with total market share falling from 22% to 19%.

The cold, hard reality is LCD and PDP price pressure is not likely to let up any time soon. Those relentless flat-panel price declines are spurred on by the growth of efficiency, manufacturing yield and display size as next-generation fabs come on line in Japan, Korea and Taiwan. Make no mistake, billions of dollars have already been invested in next-generation plants, and the price declines, particularly in the larger sizes, are going to continue.

Enter Samsung and Daewoo. Both companies have announced smaller - 40-, 50- and 60-inch for Samsung and 37-, 43- and 52-inch for Daewoo - MDTVs in an apparent effort to replace the CRT as the "poor man’s" alternative to flat displays.

Samsung is going a bit further, bowing a new thin technology that gets down to 12 inches in thickness. With some creative design techniques, the company can come pretty close to a flat-TV format in flat-TV sizes. Samsung said the thin sets will also be wall-mountable, and early reports talk of a significant "price gap" with other display technologies - figure that means PDP and LCD - but gave no hard pricing numbers yet.

Daewoo said its 52-inch LCOS set will sell for $2045 and include a set-top-box along with the 1080p full-HD display. But it will also offer a 37-inch model - a size range no other MDTV maker is targeting. Can their single-panel LCOS TV really compete against LCD and PDP-TVs of the same size? Maybe, but the Daewoo sets won’t offer the same level of performance or slim cabinets as the Samsung sets.

MDTV technology has come a long way in contributing to the DTV revolution. But we may have reached a point in market evolution where high-end, larger (greater than 60-inch) MDTVs do not offer the value proposition they once did when flat displays were priced much higher and out of the reach of mainstream consumers. Further, the price delta between smaller MDTVs and flat displays may justify a market niche for low-end MDTVs positioned as a CRT replacement. Anyway, Samsung and Daewoo aren’t taking any chances.