The HD display market

Consumer demand for flat panel displays – the HD-ready variety – continues unabated and exceeded expectations during 2006 with volume growth of nearly 80% across Europe and 130% in the USA. JIM BOTTOMS, Managing Director of Understanding & Solutions, looks ahead.

The accelerated demand for flat screen technology has resulted in the rapid decline of the traditional cathode-ray tube (CRT) market, which was overtaken for the first time last year by the flat panel market in both Europe and the USA.

Research by Understanding & Solutions points to substantial growth opportunities within the HD market, forecasting 115 million ‘HD-ready’ homes in Western Europe by 2010.

In the USA, prices dropped last year by 15% and 10% for plasma (PDP) and LCD respectively. In Western Europe, the decline was even more marked, with plasma dropping an average of 25% and LCD by 20%. On the older, lower specification models, there were price declines of 50% or more.

Other reasons for market growth are a move by the major A-brands and many other manufacturers to ‘flat panel only’ offerings – manufacturers like Sony, Panasonic, Pioneer and the likes no longer include CRTs in their TV range.

There has also been a shortening of the replacement cycle for TVs, as consumers rush to purchase these fashionable flat panel products as lifestyle statements.

SCREEN SIZE & HD-READY SUCCESS

A key feature of the rapid adoption of flat panel technology has been a marked increase in the average screen size of TVs in homes, in Europe especially. While the 32” LCD remains the most popular format in the flat panel market in Europe, there has been a distinct shift of sales towards the 37” and 42” segments, with increasing numbers of consumer opting for 50” or larger.

By 2010, Understanding & Solutions forecasts that 25% of annual TV sales in Europe will be 37” or larger, and a massive 60% will be larger than 32”. Such a shift in consumer attitudes towards TV screens would have been almost unthinkable just 5 years ago, when European consumers regarded 28” as a ‘big’ TV and many homes would now have more than 21” ‘boxes’ in the living room.

The rapid uptake of flat panel displays has coincided, particularly in Europe, with the availability of so-called HD-ready displays. High definition has been agreed in the EU to be defined as having vertical resolution of 720 lines or more. A new generation of ‘Full HD’ screens with 1080 line resolution are now appearing, but are presently too expensive for most consumers.

Within the space of a couple of years, nearly all available flat panel TVs of 28” and above have become HD-ready, a notable success for consumer electronics marketing and ‘priming the pump’ for the market take-up of next-generation high-definition DVD and HDTV broadcast services in Europe.

720 VS 1080

Until now the differing resolutions offered by flat panels TVs has remained a background issue for most consumers, with screen size and price driving the purchase decision. However, last year saw the beginning of a push by manufacturers of 1080 panels to increase awareness of what has been termed ‘Full HD’.

While all recent flat panel models are capable of handling any high definition input and scaling appropriately, whether it has 720 or 1080 lines, an increasing amount of content is becoming available in 1080 resolution, including 1080p from Blu-ray/HD DVD players and the PS3 games console.

The Interlaced vs. Progressive scan issue adds a further dimension to the argument, although one that the majority of consumers are unlikely to understand. As witnessed with processor speeds in the PC market and megapixels in the digital camera market, bigger is often perceived as better and the marketing of 1080 panels as ‘Full HD’ is expected to help drive 1080p from around 3% of total flat panel sales in 2006 in the Western Europe (8% in the USA) to over 20% by 2010 in Europe and 30% in the USA.

HIGH DEFINITION TELEVISION

HDTV broadcasting has been widely available for more than three years in the US, across all major broadcast platforms and has become the centre of a competitive battleground between the platforms and operators. Exponents of each delivery platform have tried to outperform the others, particularly in terms of the number of HD channels and amount of HD content that can be provided.

In Europe, although there are now dozens of HD channels on offer, there are few ways to actually reach consumers at present as there is no terrestrial HD (DVB-T) broadcasting and cable, satellite and IPTV operators are only just now starting to introduce HD services, and even then at a premium for subscription customers.

However, European broadcasters across all platforms are eager to introduce HDTV transmissions as early as possible, not just for competitive reasons, but also to counter the tendency of large size LCD and plasma screens to act as ‘impairment magnifiers’, resulting in a reduction in the perceived viewing quality of standard definition transmissions when compared to CRT displays....

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