The impact of higher LCD TV panel prices at the beginning of 2017 continued to weigh on retail demand for LCD TVs into the third quarter by way of slower retail price erosion, particularly in China and North America, the two most price-sensitive regions. However, demand in other regions showed signs of growth, especially in Europe and most emerging regions.
According to the latest findings from TV Sets Intelligence Service by IHS Markit, global TV shipments declined 5% year-over-year to 54.8 million units in the third quarter of 2017, while revenues increased by 1% and average selling prices were up 6% due to growth in average size and UHD mix improvement. Paul Gagnon, executive director of TV sets research at IHS Markit, said:
“Demand in China has been negatively impacted by much slower retail pricing erosion for TVs, and fewer promotions as brands seek to protect profit margins. Likewise, the high price sensitivity and minor price erosion in North America led to a 10% decline in year-over-year shipments in the third quarter ahead of the important Black Friday holiday shopping season. We expect that the more conservative promotions on Black Friday for TVs will diminish the potential volume growth this year in the US”.
Average size growth has also slowed in recent quarters as the slower price erosion impacts consumer purchasing decisions when deciding how large a screen size to trade up to, IHS Markit analysis shows. The average size of a TV shipped in the third quarter of 2017 increased 1.7% to 42.1″, although when combined with the much-reduced price erosion, helped TV revenues increase year-over-year for the first time in three years. The growth of UHD also contributed to the positive revenue result, with UHD mix increasing to 35% of units and 64% of revenues.
On a brand basis, due to the poor demand results in China, Chinese TV brands have been aggressively pursuing more business overseas, IHS Markit says. Hisense and TCL both significantly increased market share worldwide due to strong growth outside of China. Samsung and LG Electronics are the top TV brands on a unit and revenue share basis worldwide, but TCl and Hisense have risen to numbers three and four respectively, both increasing share from a year ago to their highest TV shipment share yet. Samsung and LGE each also led on a revenue basis, while Sony grew its revenue share at number three to the highest level since 2011 on growing premium TV sales, including OLED TV.
