TV Market Analysis and Commentary
Worldwide TV shipments are riding high, ending 2018 with the strongest growth rate this decade, with value up by 6%, according to a new market report from Futuresource Consulting. The report also reveals that 8K shipments, despite major obstacles, will grow considerably from 0.2 million units in 2019, with 130% CAGR through to 2023, as brands get behind the technology.
“Last year, worldwide TV shipments chalked up 227 million units, with a trade value of $85 billion,” says Matthew Rubin, Senior Market Analyst at Futuresource Consulting. “All this action is the result of a number of factors, applying pressure and influencing the landscape. Price reductions for premium technologies like 4K have started to open up the mass market; meanwhile, major investment in South East Asian production has not only helped the local market, but also driven down large screen pricing across the globe. And despite some localised macro-economic problems, which have caused significant shipment fluctuations for several countries, the world view is positive.”
BRICs Laying the Foundations
Demand from BRICs economies has eclipsed flat or declining demand in Western Europe and North America, which is partly due to households focusing on upgrading one primary TV and keeping old secondary sets for longer.
Russia benefited significantly from hosting the football World Cup in 2018, while Brazil received an extended demand boost from 2017’s analogue switch-off. The growing economic power of consumers in China and India also supported demand, both with low single digit shipment growth.
Europe Returns to Growth
Despite a weak performance from Western Europe, with shipments falling slightly in 2018, Europe as a whole returned to growth, thanks to a 6% increase in Eastern Europe. North America dipped just 0.1% in units in 2018, partly due to oversupply towards the end of 2017. Nonetheless, this represents shipments of over 42 million units, close to 2011’s peak.
Battle of the Brands
“In the battle for brand share, both Samsung and LG are losing ground due to incursions from the value end of the TV market,” says Rubin. “However, combined with Sony, their dominance of the premium segment ensures they are better-positioned to defend profit margins when compared to the government-supported Chinese brands.”
With increasing standardisation in TV sets of 40 inches and above, 4K UHD TV shipments will command more than half the market in 2019. Futuresource expects the global installed base of 4K UHD TVs will exceed 960 million by the end of 2023, equivalent to over 42% market penetration.
The 8K Play
“Although it faces a range of challenges, 8K is standing on the threshold of growth,” says Rubin. “Sets are being showcased by most brands and will grow from just 0.1% of global shipments in 2019 to exceed 2% by 2023. China will be the biggest driver of growth in 2019, accounting for nearly one third of shipments, as disposable income continues to climb. However, we expect a lack of content will persist over the coming years, curtailing consumer demand.”
Samsung and Sharp have been the only major players in 8K technology so far, but Futuresource expects most other brands to launch at least one 8K set. Content availability is likely to make some progress, driven by online platforms like Vimeo. However, with the majority of content still being produced in SD, HD and full HD, content creators still have a long way to go.
“Next year’s Olympic Games in Japan will be the first major event to be broadcast in 8K,” says Rubin. “Our forecasts show global shipments of 8K TVs will still sit below 1% of the total, with around 100,000 units shipped in Japan, representing 2% of the country’s total shipments. However, barriers to uptake will begin to fall away and 8K will grow to form a significant part of the premium market by 2023.”