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LCD Revenues To Take a Big Drop in 2009, Says Analyst Group

Post Time:Dec 30,2008Classify:Industry NewsView:405

An analyst group is predicting that the TV manufacturing industry will suffer its first overall revenue loss in years in 2009, leading to significant short trends in the industry.

Among the predictions by the consumer display researcher DisplaySearch are that well-known companies will suffocate smaller brands with lower prices, plasmas (or PDPs) will momentarily regain their old popularity, and that it will take the industry close to two years to regain its late-2007 momentum.

Like the other consumer technologies, TVs have not been immune to the economic recession. Even with the coming digital transition, consumer demand for TVs were down late in the year. The current estimate is that LCD revenues will fall 16 percent down to 64 billion, in a market where all TV sales will go down by 18%.

As we have noted before, the most obvious way in which companies deal with a downturn in the economy is by slashing the prices of their most popular products. Samsung and Sony notoriously chopped down their entry-level Blu-ray players over a month ago and they've since dominated the competition with over 75% of Blu-ray player sales.

If they continue this trend next year with TVs as expected, they'll take a stronghold of that market as well, which isn't really a good thing for consumers in the long term. In the last couple of years, so-called 'low-tiered' vendors like Vizio and Olevia have offered quality TVs at some of the best dollar-for-dollar TV values, keeping the big companies honest (and the prices stable) by leveling the field.

When the larger companies like Sony lower their prices (and they will), they will also decrease the market share of the smaller ones and put them at a disadvantage that could lead to cuts in their business. We want to see a viable Vizio pumping out sweet OLEDs four years from now, rather than seeing it sell off its scrap heap to Sony.

DisplaySearch notes that that the price quandary has also positively affected the growth of Plasma displays by up to 24% (to 13.9 M sold in 2008), and they say it will go up in 2009 to 14.6 M. This makes sense. Plasma displays are like power-armed pitchers in baseball -- the newest brands go for premium prices that moneybaggers will spend whatever it takes to obtain, and old models are downgraded but are still seen as excellent bargains by consumers, because, hey, how can you not pick up a 60-inch plasma or a 95 MPH fastball for a dime?

Even though plasmas are energy hogs and take up too much space, cheap big screens are hard to pass up. Mitsubishi offered relatively inexpensive huge-screen offerings for Black Friday that proved popular, and others will follow.

Looking between the lines at the graph above, there's also the understanding that a large growth in new display technologies like OLEDs will not occur fully until the economy gets up on its feet.

Source: blog.wired.comAuthor: shangyi

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