Flat Panel TVs and Microdisplay RPTVs Achieve Record Results Worldwide

DisplaySearch: Worldwide TV shipments were up 12% Q/Q and 2% Y/Y in seasonally strong Q3’05 to 43.6M units, within 0.6% of DisplaySearch’s forecast. With pricier flat panel and microdisplay rear projection TVs (MD RPTVs) gaining share, revenue growth continued to outpace unit growth with revenues up 19% Q/Q and 12% Y/Y to $19.1B. As a result, average selling prices (ASPs) rose 6% Q/Q and 10% Y/Y to $439. The flat panel TV unit share, covering LCD and plasma TVs, rose from 6% in Q3’04 and 13% in Q2’05 to 16% in Q3’05 on 37% Q/Q and 153% Y/Y growth as prices become increasingly attractive. While accounting for a minority of units, flat panels earned a majority of revenues for the first time with a 55% share, up from 48% in Q2’05 and 33% in Q3’04 on 34% Q/Q and 87% Y/Y growth.

• LCD TV shipments rose 36% Q/Q and 156% Y/Y to a record high 5.5M units and a 13% share of the TV market, up from 5% in Q3’04 and 10% in Q2’05. With LCD TV ASPs rising 1% Q/Q to $1190 due to significant gains by larger sizes, LCD TV revenues surged 37% Q/Q and 103% Y/Y to $6.5B and a 34% share of the worldwide TV market in Q3’05, up from 29% in Q2’05 and 19% in Q3’04. The average LCD TV diagonal grew from <24”>25” as the 30” and larger share grew from 29% in Q2’05 to 36% in Q3’05 as prices reached new lows. LCD TVs gained share vs. other technologies across most size categories between 15”-19” and 45”-49”. All regions enjoyed at least 44% growth Q/Q except Japan which was up just 1% due to its already high penetration. Europe remained the leading region with a 40% share, up from 38%, while the North American share rose from 27% to 30%. For the first time, 32” LCD TVs were the single most popular size in every region, earning a 27% share worldwide, up from 21%. 20” remained the #2 size followed closely by 26”. By brand worldwide on a unit basis, the top 5 remained the same with Sharp #1 maintaining an 18% share, followed by Philips/Magnavox, Samsung, Sony and LGE. Regionally on a revenue basis, the leaders remained the same with Sharp leading in Japan and North America, Philips #1 in Europe, Hisense leading in China and LGE #1 in ROW.

• Plasma TV shipments grew 40% Q/Q and 143% Y/Y to a record 1.6M units and a 3.6% share, up from 2.9%. Significant price declines, particularly from early September, supported the strong growth. Blended plasma TV ASPs dropped 8% Q/Q and 32% Y/Y to a record low $2057 with 37” HD, 42”-43” HD and 50” prices all down at least 13% Q/Q. Despite the lower prices, plasma TV revenues also established a record high, up 29% Q/Q and 65% Y/Y to $3.96B and a 21% share of TV revenues, up from 19%. The HD share of the PDP market rose from 40% in Q2’05 to 47% in Q3’05 worldwide and from 51% to 66% in North America with PDP manufacturers positioning HD products for faster growth as evidenced by the price gap between 42”-43” HD and 42” ED falling 47% from $2012 to $1061 from Q3’04 to Q3’05. 50” was the fastest growing size in Q3’05, up 89% Q/Q, enabling its share of the plasma TV market to rise from 9% to 12%. The 50” plasma share of the 50”-54” TV market surged from 22% in Q2’05 to 31% in Q3’05, gaining share from CRT RPTVs as MD RPTVs also gained share. 42”-43” HD was the next fastest growing size category, up 73% Q/Q and earning a 29% share, up from 23%. 42” ED remained dominant with a 50% share, although it was down from 56% in Q2’05. The <42” style="background-color: rgb(192, 192, 192);">Panasonic remained #1 in plasma TVs with its share rising from 27% to 29% on 51% growth. It remained #1 in Japan, North America and Europe and overtook Changhong for the top position in China. LGE remained #1 in ROW. By size/resolution, Panasonic was #1 in the 5 largest categories - 37” ED, 37” HD, 42” ED, 42”-43” HD and 50”.

• MD RPTVs rose 50% Q/Q and 44% Y/Y to a record high 634K units after declining sequentially for the past two consecutive quarters. MD RPTV shipments surpassed CRT RPTV shipments for the first time worldwide. The MD RPTV share of the global TV market rose from 1.1% in Q2’05 to 1.5% in Q3’05 on a unit basis and from 6.5% in Q2’05 to 8.1% in Q3’05 on a revenue basis. By technology, DLP and LCOS drove the growth, up 66% and 151% Q/Q with LCD RPTVs up 29%. Due to its significantly faster growth, DLP overtook LCD RPTVs with a 47% to 46% advantage. Gains by 1080p MD RPTVs caused the blended ASP to fall just 2% Q/Q and 18% Y/Y to $2428 enabling MD RPTV revenues to reach a record $1.54B, the second highest quarter to date and up 47% Q/Q and 18% Y/Y. Gains by LCOS, and 1080p DLP sets, which feature larger average diagonals, enabled the average MD RPTV diagonal to rise from 51.4” to 51.7”. By resolution, 1080p MD RPTV shipments reached a 7% share in Q3’05, up from less than 1% in Q2’05. North America continued to dominate the MD RPTV market earning an 88% share, up from 84%. North America gained sequential share from all other regions on 58% Q/Q and 47% Y/Y growth. North America led in every size and resolution category. China also experienced rapid growth, up 44% Q/Q, while ROW and Europe declined Q/Q. Japan shipments were also broken out for the first time. By size, larger sizes continued to gain share with <50” style="background-color: rgb(192, 192, 192);">Samsung remained #2 although its share fell from 25% to 21%. Mitsubishi rose from #4 to #3 on rapid growth in LCD RPTVs as well as DLP. Panasonic fell from #3 to #4 while Toshiba jumped from #7 to #5. By brand by region, Sony led in each region except Japan which was led by Epson.

• CRT TV unit shipments declined 8% Y/Y while rising 8% Q/Q to 35.5M units. All regions suffered declines of at least 9% Y/Y except China which was flat and ROW which was down 1%. ROW remained dominant with a 45% share, down from 47%, followed by China with a 21% share, up from 19%. With pricing pressure from LCD TVs and loss of share at larger sizes to LCD TVs, CRT TV ASPs were down 7% Q/Q and 17% Y/Y with the average size falling to 22.5”. As a result, CRT TV revenues were down 24% Y/Y and accounted for a 35% share of the total TV market, down from 51% in Q3’04. By size, the 30” and larger share fell from 7% to 6% with the 21” and smaller share rising from 60% to 61%. Samsung overtook LGE to become the #1 branded CRT TV manufacturer followed by LGE, TTE which remained #3, Funai which rose from #5 to #4 and Philips/Magnavox which fell from #4 to #5. By brand by region, Mitsubishi overtook Panasonic for #1 in Japan, Funai remained #1 in North America, Samsung remained #1 in Europe, Konka overtook Changhong in China and LGE remained #1 in ROW.

• CRT RPTV shipments fell 10% Q/Q and 58% Y/Y to 479K units. Its share of the total TV market fell from 2.6% in Q3’04 to 1.4% in Q2’05 and 1.1% in Q3’05. As a result, it fell behind MD RPTVs for the first time worldwide. Declining demand and pricing pressure from MD RPTVs and flat panel TVs caused ASPs to drop 15% Q/Q and 25% Y/Y to $1032, a record low. As a result, revenues were down 23% Q/Q and 68% Y/Y to $494M, also a record low. While no regions earned Y/Y unit growth, Europe and China earned Q/Q growth with China’s share rising from 18% to 24% and Europe’s share rising from 8% to 10%. North America remained dominant with a 49% share, down from 54% in Q2’05, on a 19% Q/Q and 58% Y/Y decline. By brand on a unit basis, TTE remained #1 with its share rising from 20% to 24%. Samsung remained #2, Toshiba rose from #4 to #3, Hitachi rose from #5 to #4 with Mitsubishi rising from #6 to #5. By region, TTE led in North America, Samsung led in Europe and ROW and Changhong was #1 in China.

In terms of worldwide TV shipments and revenues by supplier, Samsung remained #1 on a revenue basis and overtook LGE to become #1 on a unit basis as shown in Tables 1 and 2. Samsung has earned this position due to its strong position in each technology although it did not lead in any single technology. On a unit basis, it was #2 in CRT TVs, MD RPTVs and CRT RPTVs and #3 in plasma and LCD TVs. While Panasonic was #7 on a unit basis, it was #2 on a revenue basis due to its dominant plasma position. More: Quarterly Global TV Shipment and Forecast Report Publ 20051201