Flat-panel TV market will continue to grow
Jerry Epperson -- Furniture Today, 11/17/2008 12:00:00 AM
What is rectangular, colorful, runs on electricity, and has unit sales up 49% in the first half of 2008?
Yes, Americans love their televisions, and the new flat-panel HDTVs are all the rage. Sales have slowed in recent weeks, but they still rank high on Christmas wish lists.
Dollar growth is not growing as fast as units because prices continue to fall. Recently, one retailer offered a 73-inch Mitsubishi HDTV for under $2,000. That is a lot of TV, and you had better have a big room.
The shift from analog to digital has gotten a lot of attention, but as of year-end 2008, only 22.1% of American homes will have a flat-panel HDTV, or about 25 million homes. More TVs have been sold, but many of those 25 million homes now have two or more HDTVs.
According to Pricewaterhouse Coopers, as recently as 2005 only 3.6% of American homes had the new televisions, and the growth has been steady to 9% in 2006, and 14.3% in 2007.
Further, Pricewaterhouse Coopers is forecasting rapid, steady growth to 75 million homes, or 63.4% of all U.S. households by 2012. Is this possible?
In a recent interview in Advertising Age, the head of Samsung Electronics America was confident of continued growth not in spite of the economy, but because of it. Samsung has 18.9% of the total flat-panel TV market in the United States, the largest share overall, and he should know.
Samsung's Steven Cook notes that American consumers are cutting back on many discretionary expenditures — movies, dining out, vacations, etc. — but they are not staying home to “twiddle their thumbs.” Yes, they may purchase a 42-inch HDTV instead of a 61-inch, but they will make the purchase.
Who will they buy from? Samsung is continuing to aggressively promote, unlike some of its competition, but they are more focused to get a higher return on their advertising dollars. They are targeting “young-minded consumers,” a mindset, not an age or income.
They are promoting on sports, but not just the NFL, and also with music sponsorship, fashion markets and “cyber” games.
You cannot sustain nor gain share of market unless you stay in front of your potential market.
Every big HDTV requires some change to the room's furnishings. Even if wall mounted, the DVD, cable box, TiVo and surround-sound devices need a place to go.
Analog TV goes away Feb. 17, but the movement to big flat-screen TVs will continue.
