Sector Insight: TVs

TVs have bucked the trend for smaller, more portable electronics, but consumers are drawn to the fast- evolving technology.

Sector Insight: TVs

Portability has become the must-have attribute of most electronic devices, and many technological advancements have been prompted by the decreasing size of equipment. However, there remains one notable exception to this trend: the development of televisions.

While sets have become thinner in recent years, enormous flatscreen TVs are the latest status symbol, with the walls of even the pokiest sitting rooms being forced to support ever-wider screens as consumers try to reconstruct  a cinema-like environment in their homes.

However, the recession has curtailed consumers' willingness to spend lavishly on the latest equipment, and shoppers are becoming adept bargain-hunters, selecting on price. Always ready to jump in where a gap presents itself, supermarkets have been expand­ing their lower-cost electronics ranges.

Even among those consumers who do want to buy a new TV, many are delaying purchase - according to a GMI internet poll, a quarter of respondents said they are holding off until prices fall further.

Lower prices have kept volumes up but they have affected the value of the sector. Between 2007 and 2009, Mintel estimates that unit sales rose by 950,000, but value fell by £89m in the same period. The market is predicted to be worth £3.5bn by the end of the year.

Where once television-buying was all about larger-than-life viewing, HD is now a key driver. Sales of TV sets bigger than 26in have dropped by 40% since 2004, but HD-ready sets are gaining ground.

One- third of the UK adult popu­lation now has an HD-ready set, with penetration doubling over the past two years. These sets have been boosted by the digital-TV switchover, as well as more accessible HDTV on cable and satellite, with a Freeview offering expected by the end of the year.

As the national digital rollout has started, councils in newly switched-over areas have reported a rise in television recycling as this becomes an excuse for people to buy a new set.

Competition is fierce in this category, and manufacturers have set their prices accordingly.

When it comes to purchasing a new TV set, 86% of consumers report that price is an important factor, followed by 75% citing screen size. The third-most-important aspect of consider­ation was the TV's brand, according to Mintel.

LCD has largely won the battle against plasma screens, becoming the dominant technology due to its better suitability to smaller screens.

Sony is the leading brand, although its 21% share has been fairly static in recent years. It is closely followed by Samsung, whose share has grown by 8.5% over the past four years. Philips has lost ground, while LG Electronics has advanced.

Own-label is gaining ground, especially at the expense of weaker brands, and is estimated to account for 6.5% of the market this year.

Sony has an enviable position as a premium brand with a reputation for quality, selling TVs under both the Sony and Bravia brands. It continues to push the boundaries of technology with advances such as the AppliCast, which can access RSS feeds, and the Intelligent Presence Detector, which can tell when the viewer has left the room and so switches the TV off automatically to save energy.

LG has been innovating in similar ways. Last year it introduced the Scarlet LG70, an HD LCD set that includes both an Intelligent Sensor, which adjusts the TV for optimal viewing settings, and TruMotion, which reduces blur and improves colour changes.

Developments such as HDTVs that can surf the web and access online video content will help to re-establish the TV as the media hub of the house­hold, as will the arrival of organic light-emitting diode (OLED) sets, which promise better pictures, thinner screens and lower power consumption. These technologies will reach the mass market over the next five years.

By 2014 the value of the market will have risen to £4bn, a 14% rise on 2009, according to Mintel. Volumes will rise to reach 11.3m units, a rise of 26%.

 

TV Brands by UK Market Share
RankBrand20092008200720062005% change
%%%%%
1Sony  212120.720.520.30.7
2Samsung  1917151310.58.5
3LG Electronics  14119.78.36.87.2
4Panasonic  131312.613.514.5-1.5
5Alba  6.56.56.86.56.20.3
6Philips  610.512.213.414.3-8.3
7Toshiba  5.55.56.37.28.1-2.6
Own-label  6.5532.524.5
Others  8.510.513.715.117.3-8.8
 
Source: Mintel 

 

TV and Satellite System Advertisers by Adspend
RankBrand2008 spend (£)
1Panasonic UK  6,990,919
2Sony UK  4,667,538
3Samsung (UK)   3,566,779
4LG Electronics UK   3,168,113
5Toshiba (UK)   955,522
6Bang & Olufsen UK  781,033
7Bose   406,589
8Pioneer (GB)   310,826
9Philips Consumer Lifestyle  203,531
10Hitachi Consumer Products Europe  127,184
 
Source: The Nielsen Company 

 

UK TV Volume Sales by Screen Type
Screen Type200920082007
(000s) %(000s) %(000s) %
CRT  501100180010
LCD  790088755088640080
Plasma  9001080095507
Rear projection  100115022503
Total  895010086001008000100

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