After a relentless price war and tough competition against local brands in 2006, foreign flat TV makers expect a better year ahead through adjustments to attract more domestic consumers, strong innovation capacity and an abundant supply of flat TV panels. Chinese consumers bought 4.77 million flat TV sets LCD and plasma screens out of a total 35 million TV sets purchased in the country in 2006.
Although the share of flat TV sets was only 13.6 percent of the total, sales of LCD and plasma TV sets accounted for 36 percent of 93.59 billion yuan in total sales last year. Growth in the number of flat TV sets shipped was also impressive with a rise of 151 percent. China will become a major arena of competition in flat panel TV sets for global TV makers before new technologies come out.
LCD TV sets accounted for over 80 percent of the shipment of flat panel television sets last year. Plasma screens represented the remaining 20 percent, a rate expected to continue as market leaders, including domestic firms Skyworth and Konka, as well as Sony and Toshiba, focused their production lines on LCD.
Last year, domestic brands continued their dominance in the LCD TV market with a share of almost 65 percent. And of the top 10 players, only three firms Samsung, Sony and Toshiba were foreign brands. When measured in sales, foreign brands showed better performance, taking 45 percent of the total. The performance of foreign brands in 2006 was much better than the previous year, when they only held 20 percent of the LCD market.
Foreign brands will see a better time in 2007, especially in first- and second-tier cities. First- and second-tier cities refer to the metropolises of Beijing, Shanghai and Guangzhou, as well as other provincial capitals.
Statistics from Gome Eletrical Appliances Holding Ltd, the largest home appliance retail chain in China concentrated in large cities, show the share of foreign brands rose to 44 percent in 2006 from 31 percent in 2005.
The State Information Center predicts the shipment of LCD TV sets will grow by 80 percent this year to 7 million units, while the plasma set market will see a 35 percent increase to 1.1 million units.
While plasma TV sets are popular in other countries due to a better visual performance on big screens and a larger viewing angle, the market suffered a setback in March when most plasma sets tested were unable to meet the national standard for high-definition TV. The reality that plasma TV sets are most attractive in large screen configurations above 42 inches also hinders their development as ordinary consumers do not have an appetite for such big screens.
It was an unexpected blow to companies like Samsung and LG, both of which have LCD and plasma products, and Panasonic and Hitachi, which focus on plasma products. But they adapted in the second half last year when they began to shift production and resources to LCD products and domestic brands have seen increasing competition.
Foreign manufacturers, attacked with price wars from domestic players for over a decade, have now learned how to fight back in cost competitiveness. Prices of mainstream 35- to 46-inch products fell by almost 40 percent last year.
Foreign brands such as Samsung, LG, Sony and Sharp have their own production facilities for flat TV panels, a key component in TV sets, and that gives them strong bargaining power on supplies and global reach in procurement.
Chinese TV makers, which aim to have a bigger say in the supply of panels, have set up three production plants, but because flat panel manufacturing requires large capital outlays, the three firms issued a statement in December announcing that they were considering a merger. The merger is expected to delay the volume production, thus adding uncertainties to domestic TV makers, many of which are investors in the production facilities.
Source:未知