IHS: Global TV Market Contracts for Second Straight Year in 2013

EL SEGUNDO: The global television market shrank in 2013 for the second year in a row, with China, the Asia Pacific and Eastern Europe suffering a rare decline, according to IHS Technology.

Shipments worldwide of televisions in 2013 amounted to 225.1 million units, down sharply from 238.3 million in 2012. It was the second straight year of contraction after a 7 percent loss in 2012, contrasting with the market’s 11 percent surge in 2010 and a more modest 1 percent rise in 2011.

China suffered a reversal during the third and fourth quarters of 2013, as the country’s LCD TV market declined in those quarters compared to the same three-month periods a year before in 2012 (the first time this has happened). New growth in China's TV market is increasingly hard to come by, according to IHS, and an expired subsidy program provided by Beijing for new appliances has removed a previously powerful incentive for consumers to make new TV purchases. All told, LCD TV shipments in China during the third quarter of 2013 fell to 13 million units, down from 14 million a year earlier. Fourth-quarter LCD TV volume declined similarly to 14.4 million, compared to 14.5 million from a year earlier. Overall LCD TV shipments to China for last year rose from 2012, thanks mainly to a strong first half.

For the Asia Pacific, LCD TV shipments last year amounted to 23.8 million, down from 25.4 million in 2012, with choices for cheaper-priced sets disappearing from the region’s market. Manufacturers ended production of Cathode Ray Tube (CRT) televisions (that had been the most affordable for consumers in the area), and brands have also pulled back from older-generation LCD TVs and plasmas because of vanishing profit margins. With light-emitting-diode (LED) sets still beyond the reach of many, TV demand in the Asia Pacific fell last year and continues to remain on a holding pattern.

Overall TV shipments in 2013 for North America fell 9 percent on the year, while Western Europe showed an annual loss of 4 percent. The TV market for both regions now consists entirely of LCD TVs and plasma sets, absent the analogue, tube-type televisions that can still be found in other territorial markets, including the Middle East and Africa, Latin America and the Asia Pacific. Meanwhile in Eastern Europe, LCD TV shipments were off last year by 14 percent, mirroring financial troubles in the European continent.

Despite the decline in 2013, worldwide TV shipments are expected to improve. The developed markets of North America, Western Europe and Japan will stabilize in the coming years, and no large yearly decreases are forecast for the time being. At the same time, significant growth can be expected from China, the rest of the Asia Pacific, Latin America and the Middle East and Africa markets. Latin America, in particular, will enjoy a spike for several reasons, including projected economic growth, the FIFA World Cup soccer championship later this year, the analogue-to-digital changeover in 2015, and the Summer Olympics in 2016.

“The global TV market continues to be in transition following a golden period of tremendous growth from 2009 to 2011,” said Jusy Hong, principal analyst for consumer devices at IHS. “Television shipments were down again in 2013 just like in 2012, but an unusual development was the slow market last year in China, the Asia Pacific and Eastern Europe—until recently among the brighter spots for the industry.”