LCD-TV Poised to Take Over Consumer-Electronics Market by 2012

Despite current economical challenges, the global LCD-TV market is likely to continue its rapid growth during the coming years, and could become the largest segment of the consumer-electronics industry by 2012, according to iSuppli Corporation.

At iSuppli’s North American Briefing event, Sherri Greenspan, iSuppli’s senior analyst for consumer electronics, yesterday shared her prediction that worldwide OEM factory revenue for LCD-TVs will rise to $110.8 billion in 2012, nearly double the $61 billion in 2007. In 2012, LCD-TV revenue will exceed that of consumer appliances, marking the first time that the vast appliance sector has not generated the most money in the consumer-electronics industry since iSuppli began collecting data on this market. Currently, LCD-TV is the second largest revenue-generating segment of the 20 consumer-electronics product categories tracked by iSuppli.

“Consumers want their electronics, in good times and in bad,” Greenspan told the audience at the event. “Because of this, the consumer-electronics market will continue its incremental growth over the next four years, driven by LCD-TVs, along with consumer appliances, digital Set-Top Boxes (STBs), digital still cameras and video game consoles.”

Factors driving LCD-TV shipment growth include the global transition to digital broadcast, rapidly declining prices, and consumer preferences for high-definition displays and thin form-factor sets.

Greenspan added that global consumer-electronics OEM factory revenue rose by 2 percent in 2007 and is predicted to rise by another 6.5 percent in 2008. Corresponding with the rise of the LCD-TV market will be the expansion of the digital STB segment.

“Global digital STB factory revenue is expected to grow to $25.6 billion by 2012, rising at a Compound Annual Growth Rate (CAGR) of 11 percent from $15.2 billion in 2007,” Greenspan stated. “Consumers continue to upgrade their televisions with new premium services, like high definition and Video on Demand (VoD), requiring new STBs.”

Shipments of STBs also will be driven by consumer demand for Digital Video Recording (DVR), which increasingly is becoming standard in set-top boxes, according to Greenspan.

Other areas of growth in the consumer-electronics market include digital still cameras, whose revenues will rise to $26.9 billion in 2012, expanding at a CAGR of 6.6 percent from $19.6 billion in 2007.

“Growing demand for the higher-priced digital SLR cameras is helping drive overall pricing up, as is continued consumer interest in higher resolution and video-capture capability,” Greenspan said.

Also on the rise are video-game-consoles, with revenue predicted to grow to $14 billion in 2012, rising at a CAGR of 5.9 percent from $10 billion in 2007. Mass market adoption, new game titles, accessories and price drops are helping drive demand, along with evolution of game consoles into media centers, Greenspan explained.

A large number of consumer electronics products are prime candidates to undergo a convergence of functionality, Greenspan stated. More than 800 million individual consumer electronics products shipped worldwide in 2008 could potentially be affected by some form of convergence, a number that will rise to 1.2 billion by 2012.

“Elements driving the convergence trend include peer pressure and the ‘coolness’ factor,” stated Greenspan. “It also will help consumers to save money as it often costs less to buy a device with converged functionality, rather than buying several devices.”

Greenspan identified several product segments that are undergoing convergence with each other, including:

-- Portable Media Players (PMP) and mobile handsets
-- Video game consoles and Blu-ray Disc players
-- Blu-ray Disc players and Set-top Boxes


iSuppli Corporation is the global innovator in technology value chain research and advisory services. iSuppli provides market intelligence services for the EMS, OEM and supplier communities in addition to servicing consumer electronics and media concerns.



Michelle Robart is a contributing editor for TMCnet. To read more of Michelle's articles, please visit her columnist page.

Edited by Michelle Robart