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PROCAMS 2005

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. Insight Media Overview. Focus Only market research firm with an exclusive focus on microdisplay-based products Products & Services Newsletters

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PROCAMS 2005

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  1. PROCAMS 2005 Chris Chinnock Insight Media

  2. It’s a Jungle Out There A 10,000 foot view of the competitive landscape in consumer display markets

  3. Insight Media Overview • Focus • Only market research firm with an exclusive focus on microdisplay-based products • Products & Services • Newsletters • Reports • Conferences • Consulting Services

  4. 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

  5. Technology Battlegrounds CRT RP CRT FP LCD PDP µD RP 30” 36” 46” 56” 66”

  6. The Weapons • Training • Promotion • Brand • Channel • Supply Chain • Screen Size • Resolution • Brightness • Contrast • Price • Form Factor • Cosmetics • Features

  7. Big Screen Displays Increasing ASPs rising too – How many industries can claim that?

  8. 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

  9. 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

  10. 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

  11. 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

  12. 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

  13. 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

  14. 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

  15. 40-44” DLP RPTV 1Q2005 4Q2004 40-44” 3LCD RPTV 42” EDTV PDP 42-43” HDTV PDP 40-42” HDTV LCD The 42” Battle Source: PMA March 2005 FPD & RPTV Tracking Services

  16. 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

  17. MCG Optimistic Forecast

  18. Forecast vs. Actuals (2004/2005)

  19. MD-TV Forecast

  20. 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

  21. 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

  22. 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

  23. Insight Media 3 Morgan Avenue Norwalk, CT 06851 USA 203-831-8464 203-838-8432 fax www.insightmedia.info

  24. DTC Forecast

  25. US TV Size Trends (3MPO)

  26. TV Market Size • Total number of TVs WW in 2005 = 170M to 200M • Could grow to 215M by 2009

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