Market Watch

More 50-inch-and-larger TVs Bought by U.S. Consumers in Q1 2011


22.7 percent of American consumers purchased the sets, up nearly 3 percent quarterly
U.S. consumers in the rst quarter of 2011 bought more TVs sized 50 inches and larger than at any time during the past year, with the percentage now exceeding one-fth of all sets sold during the period, according to IHS iSuppli research.

A total of 22.7 percent of American consumers bought TV sets 50 inches and larger during the three months from January to March 2011, compared to 19.8 percent in the fourth quarter of 2010. The only other time when 50-inch-and-larger sets breached the one-fifth mark—or more than 20 percent—within a one-year span from the present occurred a year ago during the first quarter of 2010, reaching the slightly lower level of 20.2 percent.

 TV Purchases

At the top of the market, reigning as the preferred size range for U.S. consumers, were TV sets ranging in size from 40 to 49 inches, capturing 39.5 percent in the first quarter this year, IHS iSuppli data show. Next were TVs in the 30- to 39-inch range, with 25.5 percent, followed by the 50-inch­ and-larger sets. For the remaining two categories, the less than 20-inch range as well as the 20- to 29-inch range, fewer customers bought into those groups during the equivalent period, and total numbers decreased for both categories.

In addition to grabbing increased share, the size range represented by 50-inch-and-larger sets was also significant in that its percentage share of market grew the most between the fourth quarter last year and the first quarter in 2011. The portion of U.S. consumers who preferred that size grew 2.9 percent, compared to 1.2 percent for the 30- to 39-inch range and 0.6 percent for the most popular 40- to 49-inch range.

The reason that a greater number of U.S. consumers now are buying 50-inch-and-larger sets stems from pure market economics, IHS believes. TVs have become less expensive for the consumer, allowing even the bigger sets initially considered beyond the reach of most consumers to become accessible. At the same time, consumer demand toward ever-bigger sets has not let up, with the acquisition of larger sets viewed as highly desirable for ordinary American households.

Along with lower pricing, such consumer preferences combined to make a convincing case for TV brands to promote 50-inch-and-larger sets in the market, benefiting brands and manufacturers as well because the sets offered bigger margins and profits.

TV Pricing Rebounds in April, but Pricing Changes Uneven Depending on Channel
Overall, U.S.TV prices rebounded after a four-month slide, as average TV prices increased by 2.8 percent from the March time frame. Pricing changes occurred unevenly, however, depending on where a TV was purchased, with some channels showing a reduction in price and yet others reporting an uptick.

Among mass merchandisers—stores like Target and Walmart, which sold TVs along with other consumer goods such as clothing and food—a slight decline in pricing ruled, driven by older inventory of premium and value TV brands alike. 

In contrast, a change in product mix effectively increased TV prices for value brands in club and online stores, as well as in premium and store TV brands for online retailers. Club stores are defined as locations—such as Costco’s and Sam’s Club—that sell a wide variety of merchandise, including TVs. Online stores are websites— such as Amazon.com and Crutchfield—that sell consumer electronics.

The average price in April for liquid crystal display (LCD) televisions was $1,022, compared to $2,373 for 3-D LCD TVs. For plasma televisions, average pricing in April amounted to $1,629, compared to $1,978 for 3-D plasma TVs.

Following the Japanese earthquake and tsunami disaster, LCD TV production in Japan has reported minimal disruption. Though some TV assembly plants have been affected by semiconductor component shortages, the weak demand worldwide in recent months for general component inventories has meant that the TV markets suffered only very minimal impacts in the quake’s aftermath, IHS iSuppli research shows.

Read More > New 2011 Prices Re ect Demand for Larger-Sized TVs