Meko Press Releases

Flat Panels To Outsell CRTs In Europe In Q4 2006

DATE: 7^th April 2006
The latest forecast from Meko's DisplayCast ATV market intelligence service indicates that, although the overall market for TV sets in Europe is not growing significantly, the transition from CRT to flat panel sets is accelerating. By the end of this year, more non-CRT sets will be sold in a quarter than CRT sets, marking a clear and important transition point for the market.

"We expected to see rapid growth in sales of flat panel TVs when we first began our research in this area", noted Pete Gamby, Meko's research director. "But the speed with which some markets have adopted LCD and plasma sets has been exceptional. This rapid rate of adoption is driven by falling prices and wider availability of flat panel sets at all screen sizes".

Shipments of LCD TVs in Europe topped 7.5m units in 2005 and plasma TV set sales also boomed to exceed 2.1m sets sold. This was despite some shortages in the latter part of the year for some suppliers for both types of flat panel set. Away from the flat panel market, Sony revitalised the rear projection TV sector and its fourth quarter sales boosted shipments to just over 0.25m units for the year.

Despite these strong performances from the newer TV technologies, CRT shipments still accounted for the majority of the market by volume in 2005 with sales totalling 27m of the approximately 38m sets sold. The forecast for the incumbent TV technology is not good though, with Meko predicting a decline in CRT sales to 21m in 2006. "Looking further ahead, CRT shipments will be down to 12m in 2008 as supply is reduced as tube factories close or are converted to supply other components", commented Gamby.

For 2006, Meko estimates that sales of LCD TVs will rise to more than 14m units with plasma set shipments increasing to nearly 4m. "The expectations for plasma are high but there will be a real battle in the 40" and 42" screen size segment", says Gamby. "The plasma makers must ensure good supply and stay competitive on pricing in order to achieve their targets and many are expecting higher sales than we have predicted for this year", he continued.

Meko believes that there is a danger that the enormous capacity being added in the LCD supply chain will swamp the market with cheap products and this could force the plasma makers to move the battle up in size to the 50" and larger sector. For the European TV market, this sector is not a large one though as both limited consumer expenditure and relatively smaller living spaces than in the US mean only 1% of sets sold in Europe are 50" or larger. In contrast, the 40" and 42" sector already accounts for about 8% of the market by volume and falling prices will drive this up to more than 20% of sales by the end of 2008.

Whilst Meko is not expecting anything more than single digit growth in year on year unit sales in the TV market, the opportunity for revenue is good provided that European economic growth continues as expected. Average selling prices for LCD and plasma sets will fall. However, consumers will want to buy TVs that can receive high definition (HD) programming and that will be usable after the transition to all-digital TV transmission. This means that revenues should increase as old CRT sets are replaced sooner than they have been in the past. "It is also possible that we could see households making two major set purchases between now and the expected analogue switch-off dates", commented Gamby. "The first might be a household's first LCD TV and perhaps this will be a 26" or 32" set. Later, as HD-capable sets at 40" and above become more affordable and have integrated digital tuners or even integrated HD receivers as standard, consumers might upgrade again and move the first set to another room in the house".

Meko is forecasting revenue growth at the consumer purchase price level from around $27 billion in 2005 to more than $41 billion in 2008 based on the current ASP trends and the shift from CRT to flat panel sets.

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Notes to Editors:

Graphs available on request:
European TV Market Shipments and Forecasts Q1'05 to Q4'08
European TV Sales by Type 2006

For more information about Meko and DisplayCast please contact
E-mail: bobr@meko.co.uk
Tel: +44 (0)1276 22677

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