Market opportunities and challenges.
IHS Markit principal analyst for consumer devices, Paul Gray, spoke to Appliance Retailer about the television market and his future expectations for the category.
What is your outlook on the current television market?
Globally, most markets are mature and it is essentially replacement-driven. In developed countries we are seeing a trend towards fewer TVs in the home as consumers do more personal viewing on tablets and smartphones (for example watching in bed).
There is huge investment in China to build 10th Generation LCD display fabs, optimised for 65- and 75-inch screen sizes. This will bring down the costs (and retail prices) of very large screens. Expect size growth (which has been 1-inch per year) to continue. In the end, we will start to hit real obstacles to size growth, country by country, depending on living room size.
What are the biggest opportunities and challenges facing the market?
Big screens and UHD present the biggest opportunity to manufacturers. Very large screens will need a 4K UHD signal to get the most out of them, and as said earlier, big screens will rapidly come down in cost.
The opportunity for retailers is that the larger sets (65-inch and above) don’t fit into a car – they have to be delivered. This opens up the way to installation and other services. But a 75-inch TV in a box is more like whitegoods or furniture in terms of logistics.
However, there are several challenges. In particular, price erosion will continue to be severe on smaller screen sizes (from 40-inch to 55-inch) as larger screens compress prices. The 32-inch segment is already at the point of no further reduction – it’s hard for anyone to make a profit.
Making UHD services available to all takes a far bigger investment from broadcasters than TV brands with 4K UHD coverage for live sports technically difficult and expensive. Therefore, solving the content shortage is critical.
How do you expect the market to evolve over the next 5 years?
Principally it will be larger sizes – growth in Australia will really only be in 55-inch and above, with 40-inch to 50-inch remaining relatively stable and 32-inch falling. It will be interesting to see how Australia plans its broadcasting as most countries with MPEG-2 first-generation systems are migrating to newer, more efficient standards which offer higher resolutions.
What is your opinion on the competing display technology on offer?
I don’t think there is an inherently superior technology. Each technology has its own advantages and disadvantages. If you watch TV in a dimly-lit room then OLED is probably more suitable. If your room is brighter-lit, then the peak light outputs available with LCD and full array local dimming are really appealing. My advice is for consumers to do a side-by-side test in living room conditions and buy what they like best.