Global shipments of large-sized liquid crystal display television (LCD TV) panels for the first half of 2012 enjoyed modest growth compared to the same six-month period last year, due primarily to a strong second quarter that made up for losses suffered during the first, according to an IHS iSuppli LCD Health Watch report from information and analytics provider IHS.
Shipments worldwide of large-sized LCD TV panels amounted to 105.6 million units from January to June this year, up 2.6 percent from 102.9 million units during the first half of 2011. The first quarter had been weak in line with normal seasonal patterns, with shipments amounting to 51.1 million units, down 9.6 percent from 56.5 million in the fourth quarter of 2011. But shipments rebounded in the second quarter to 54.5 million units, up 6.7 percent sequentially from the first quarter.
Large-sized LCD panels are defined as those 10-inch and bigger in dimension and utilized in the three major applications for televisions, monitors and notebook PCs. As such, the market is distinct from the small- and medium-sized panel space for devices like smartphones, tablets and digital still cameras.
The strong performance of large-sized LCD TV panels during the second quarter came from the introduction of new television panel sizes, such as the 39-, 43-, 48- and 50-inch. The biggest gains in the second quarter were made by the 60-inch-and-larger segment, up a remarkable 32 percent from the first quarter, and boosted in particular by the expansion of the 70- and 80-inch markets.
Other growth drivers during the period were the launch in China of low-cost light-emitting diode (LED) TV models, and the sales buildup resulting from the recently ended Olympic Games in London.
The shift among panel suppliers to much larger sizes is understandable, especially because the smaller-sized TV panels that drove quantity sales in the past are now barely profitable in light of vastly reduced prices. The larger sizes, however, yield bigger margins that help panel suppliers recover their production costs more easily and help boost the bottom line.
The increased pressure on profitability comes at a delicate time for the entire TV space, given the slowing sales of televisions everywhere and continuing uncertainties in the global economy. To spur new purchases among consumers as the holidays approach, the industry likely will resort to a fresh round of aggressive price cuts. For instance, pricing for the 32-inch LCD TV—long a favorite size segment among consumers for secondary viewing spaces like the bedroom—could fall to a new low of $100 in the months to come, demonstrating the extent of price-cutting willing to be endured by the industry.
In a fresh bid to increase profitability, TV manufacturers have also launched an expensive new product recently on the market. The so-called 4K television is an ultra-high-definition set featuring 3840 x 2160 pixels, possessing four times the resolution of regular high-definition TVs with 1920 x 1080 pixels. Sony, LG Electronics and a few other brands are pitching products in this new segment, but the price of the new sets—pegged at more than $20,000—will effectively keep them out of reach for the majority of consumers.
Worth noting will be the impending introduction by TV panel suppliers in China of a new 28-inch panel into the U.S. market, timed to launch for Christmas, IHS iSuppli has learned. The strategy is in line with the overall push by the TV space to unveil models featuring new panel combinations and features, in hopes of capturing new buyers or persuading consumers in a mature TV market like that of the United States to replace and upgrade their older TV sets.
Lower panel prices are also being planned by the industry to pave the way for more competitive television pricing during the crucial holiday selling season. This could help the large-sized LCD TV market compete more effectively with enormously popular consumer electronic items like tablets, or the new Ultrabooks being heavily promoted for the fourth quarter.
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