By Norbert Hildebrand
During last year (Yes, it is already 2014!), high resolution (4K or UHD) TVs have become available in the market and prices have dropped faster than anyone expected. As a result, the sales volume has risen quite nicely and is running ahead of earlier expectations.
Of course it is not clear what is the cause and what the effect. Have the rising UHD TV sales caused the plummeting prices or was it the other way around? Anyway, IHS has released some early data on expected worldwide 2013 UHD TV shipments. According to their latest statement, the shipments in the third quarter of 2013 reached 1.2 million units. This number is expected to grow to 1.3 million units in the 4th quarter, bringing the total for UHD TV sets to over 3 million sets in 2013.
The January street prices of high end TVs as shown above indicates that UHD models are already closing the gap to the high end market segment in the 55″ to 65″ size range. While still more expansive than other high end and 3D models, the UHD is basically occupying the high end range of the consumer TV segment. With prices well below the $5,000 mark even for the 65″ size, pricing should not be the significant entry barrier. The same cannot be said for 55″ OLED and 84-85″ UHD TV models.
Another interesting aspect is the fact that the worldwide forecast differs quite strongly from the US forecast. As we saw with the 3D TV introduction, the U.S. market is not necessarily the driver for new TV technology anymore. When we compare the U.S. UHD TV forecast from IHS in July 2013 with these latest data we see that the U.S. market is basically not playing a significant role in the high end TV market.
This trend is also expected by NPD DisplaySearch, as can be seen in the following chart.
NPD DisplaySearch sees the UHD TV market in the first two years of its existence basically being dominated by China, with all other markets following at a slower adoption rate. This is a very interesting observation if it becomes a reality. Historically, developed markets have been the driver of new technology based on higher personal income and wider adoption of these technologies. This paradigm seems to be changing though.
Developing markets with much lower market penetration opt to buy higher end devices as a first device, rather than buying a one or two year old design at a lower price. A similar picture is being painted by an article about the TV market development in India. (Click to enlarge.)
The chart shows some key trends in the Indian market. They still see the U.S. market as the largest market, followed by China and then India. So far India was a very low cost TV market with a good market share for CRT models. It seems this is changing now. The upper and upper middle class in India have already shifted to Smart TVs, a transition that is still going on in the US market as well.
Another remarkable fact is the shift in India to worldwide brands such as LG, Sony, Samsung and Panasonic and away from local brands. This shift has already happened in Europe and the U.S. as well.
When we look at all this information we can expect that the world will act much more as a uniform market than it has been in the past. As a consequence, the market and product development can be driven from central locations rather than national hubs. If brands can lower R&D expenses and the number of SKU numbers with the release of worldwide models, technology development becomes a global rather than a national affair. This marks a significant shift in consumer electronics development, and one that will not reverse. Welcome to 2014 and the New World!