Weak Q2 Demand Pushes Down 2015 LCD TV Shipment Estimates

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The latest report from WitsView, a division of TrendForce, finds the global shipments of LCD TVs in this second quarter totaled 48.25M sets, down 6.4% from the prior quarter. Due to the slowdown in the Chinese economy, sales figures from events related the Chinese Labor Day and the Dragon Boat Festival fell below expectations. Moreover, the Greek debt crisis and the depreciation of the emerging market currencies have eroded brand vendors’ margins and led to continuing inventory accumulation of TV products.

WitsView projects that TV shipments in the third quarter will grow 19% compared with the second quarter, which had a low base period. In the latter half of the year, numerous holidays across the globe will generate market demand for TVs. China will have sales events related to the Mid-Autumn Festival and the National Day, while the United States and Europe are readying for the Thanksgiving and Christmas season. However, the uncertain global economy and the need to reduce excess inventory mean the stock up demand will not be as aggressive as anticipated. WitsView therefore has revised the shipment estimate LCD TV sets for 2015, from 223M down to 220M. The annual shipment growth estimate has also been marked down from 3.46% to 1.74%.

Korean brands face declining shipments while Sony continues to adjust its strategy

Samsung held on to its position as the LCD TV leader in the second quarter with 10.5M sets shipped, a volume comparable to that of the prior quarter. LGE followed Samsung at No. 2, but its second-quarter shipments dropped 5.3% due to poor sales in the emerging markets and slowing Chinese domestic demand. Depreciation of the euro and emerging market currencies was also a factor. Overall, the second-quarter shipments did not grow as anticipated for the Korean brands, but instead there was a general decline.

Though Chinese brand vendors TCL and Hisense respectively stayed at the third and fourth place in the second-quarter shipment ranking, they also suffered shipment drops of 19% and 12%. Low sales during the Chinese Labor Day and the Dragon Boat Festival hurt their performances. On average, the six major Chinese brands (TCL, Hisense, Haier, Konka, Changhong and Skyworth) suffered a 12.3% quarterly decline.

There are indications that some Japanese TV brands will eventually stop exporting TVs to the overseas markets. Sony was the only Japanese brand that entered the top five bracket in the second-quarter shipment ranking. Rather than just focusing on raising shipments, Sony intends to improve its profitability and business operations this year. To this end, it has introduced large-size, high-end TV sets. Set against the previous period, Sony’s shipments fell by 10% in the second quarter; and its market share also dropped slightly to 5.4%, down from 5.6% in the first quarter. The majority of Japanese brand vendors are licensing out their brand names or selling factories in order reduce their operating costs. It is expected that most of the Japanese brands will gradually cease their overseas operations in the future.