PROCAMS 2005 Chris Chinnock Insight Media. It’s a Jungle Out There A 10,000 foot view of the competitive landscape in consumer display markets.
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Focus– Only market research firm with an exclusive
focus on microdisplay-based products
Products & Services– Newsletters– Reports– Conferences– Consulting Services
Insight Media Overview
The TV Revolution is Underway
CRT to Multiple Technologies– Thin CRTs– Projection
Front and Rear CRT, LCD, DLP, LCOS technologies
– LCD– Plasma
4:3 to 16:9 Analog to Digital Standard Definition to High Definition
The Weapons
Screen Size Resolution Brightness Contrast Price Form Factor Cosmetics Features
Training Promotion Brand Channel Supply
Chain
Big Screen Displays Increasing
Over 30" Unit Share of Total TV Market
0%
5%
10%
15%
20%
25%
30%
35%
40%
2000 2001 2002 2003 2004 2005 2006 2007 2008
ASPs rising too – How many industries can claim that?
The Buying Process
Promotion, friends motivate into stores PDP-TVs attract most attention Price may push to
– Different Technology– EDTV
Consumer gets educated– Resolution, DVR, TiVo, home theater, etc.
Leaves frustrated to learn more or give up
Retail Environment
New brands popping up rapidly– Retailers, Chinese, Taiwanese, Korean, others
New ways to buy TVs– E-tailers, PC/IT channel, warehouse clubs
Consumers buy on:– Price– Image quality– Form factor, features & style
Consumers don’t really care about technology
The After Purchase Reality
Too complicated to set up Too complicated to operate/too many remotes DVDs/HDTV looks great NTSC looks bad Far more peculiarities to deal with than an
ordinary TV
MD-TV Challenges
Form factor/Cosmetics Viewing angle Brightness-contrast Lamp lifetime RPTV perceptions and awareness 3 microdisplay technologies Aggressive PDP-TV price downs Massive LCD-TV capacity investment
Home Front Projection Challenges
Wide range in prices and quality of projectors– $1,300 to $13K– Potentially best $/screen size value
Complicated system– Projector, screen, accessories
Needs installation– Who will do this?
Consumers need education– Who will do it?
Requires significant floor space to sell it– Only acceptable for big margins
PDP-TV Challenges
PDP-TV prices have come down ~30% in 2004– Driven a surge in sales– Reductions continuing (25-30% for 2005 likely)
Challenging profitability– Fujitsu sells to Hitachi– Some de-emphasizing PDP-TVs – others increasing
promotion– Samsung SDI reports profitability problems for Q2– LG backing off aggressive pricing plans
Consolidation in manufacturing base probably coming
LCD-TV Challenges
Gen 6 and Gen 7 fabs will bring enormous capacity online in 2005
– $2B investments– Need to push panels into market– History of cycles of over supply and rapid price declines
If demand is not strong, cash flow problems develop, more price reductions to stimulate demand
– Could see prolonged periods of losses
Push to 40” and 50” LCD-TVs coming sooner than expected
The 42” Battle
$1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000
40-44” DLP RPTV
40-44” 3LCD RPTV
42” EDTV PDP
42-43” HDTV PDP
40-42” HDTV LCD
1Q2005
4Q2004
Source: PMA March 2005 FPD & RPTV Tracking Services
Crushing Price Reductions
RPTV price to drop by 18% from 2004 LCD price to drop by 40% PDP price to drop and 25% Margins will be squeezed at retail New business models will develop Some will loose money
MCG Optimistic Forecast
0
10
20
30
40
50
60
70
2000 2002 2004 2006 2008
Unit Sales of TVs over 30" by Technology
FP MD
RP MD
RP CRT
PDP
LCD
CRT
Forecast vs. Actuals (2004/2005)
Forecast Comparison for MD RPTV Sales (M units)
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
2004 2005
MCG Optimistic
Actual/forecast
MCG Conservative
Other analysts 2004
MD-TV Forecast
Forecast Comparison to 2008 (M units)
0
5
10
15
20
25
2004 2005 2006 2007 2008
MCG Optimistic
MCG Conservative
Other analysts 2004
MD-TV Realities
Many are giving up on the 40-49” size range abandoning to PDP
Many are lowering forecasts for MD-TV in 2005 CRT-RPTV is hanging on longer than expected
MD-TV Options
Vertically integrate to reduce margin stacks from many components and assemblies
Offer more aggressive pricing in 42” segment to stop PDP– $1,000 DLP-RPTV planned for 2006, but need to
survive 2005– Buy market share buy lowering prices with loss
leader product
TV Prospects
Everyone forecasting the big-screen TV segment grows much bigger
– Requires a shift in consumer spending MD-RPTVs in the middle of very dynamic market
turmoil– Addressing most challenges, but unclear how all will play out
LCD and PDP have the momentum in sales volume Who wins?
– Consumers Who looses?
– Almost everyone else
DTC Forecast
165,412,496
24,709,614
7,111,125
2,993,593
4,949,169
143,327,101
48,723,552
11,821,985
1,339,023
8,191,487
112,860,386
78,227,190
14,361,477
356,011
9,347,129
020,000,0
0040,000,0
0060,000,0
0080,000,0
00100,000,
000120,000,
000140,000,
000160,000,
000180,000,
000200,000,
000
CRT TV
LCD TV
Plasma TV
RPTV - CRT
RPTV - MD
2005
2006
2007
2008
2009
2010
US TV Size Trends (3MPO)
2%
16%
46%
3%6%
2% 3%0%1%
10%
40%
31%
4%7%
3% 2% 1%1%
43%
5%7%
3% 2% 1%2%
12%
36%
6%8%
3%5%
2%
23%
11%
28%27%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Under 14" 14"-20" 21"-27" 28"-39" 40"-49" 50"-59" 60" OrMore
Don'tKnow Size
Don't Own A TV
2002 2003 2004 2005
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