You may be hiding at home, but television vendors and analysts carefully monitoring the COVID-19 Coronavirus situation around the world said that so far plans for the transition to 2020 model lines remain more or less on target.
Since the virus breakout, some in the industry have feared significant disruption to production and plans for 2020 television set shipments would have a signicant impact on available supplies and potentially, prices. But among a sampling of executives we reached before or over the weekend, plans are either on target, already in motion or delayed by a few days or weeks. That means the impact should be virtually transparent to consumers.
Paul Gagnon, executive director of market analyst Omdia (formerly IHS Market), said “the situation is changing constantly [but] most of the change seems to be happening during the last week, and is shifting from supply disruption impacts while production was disrupted in China for the last month, into more of a demand disruption as consumers re-evaluate spending priorities. It is still inconclusive. But… right now, everyone is surging into grocery stores buying staple goods to prepare for an extended shutdown of many services.”
Whether or not the disruption or mania the virus is generating will be felt longer term by potential television shoppers and the industry is still unclear but the early indications are that the disruption won’t be significant in a negative way. In fact, the crisis could end up being beneficial to the industry as a whole, some have suggested.
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Gagnon pointed out that “during the three-year period after the 2008 financial crisis, we saw an increase in demand worldwide as people spent more time at home, so-called ‘cocooning’. During that time, flat panel TVs were quite expensive, but we were still going through the digital broadcast transition and there was some government stimulus spending around the world. This time is a bit different, and I do think there may be some challenges to very premium TVs since the entry level sets, even very large ones, are so cheap.”
Another positive indicator is the growing trend of online shopping for television purchases, enabling consumers to stay home and have new TV sets delivered to help stay out of harms way.
As for TV makers, global market share-leader Samsung of South Korea issued a press statement that “as Samsung announced last week, our 2020 TV Line up has already launched and begun shipping into the U.S. market according to previously scheduled release dates. Samsung is making every effort to minimize impact on our operations and meet consumer demand.”
LG issued a similar global launch announcement for its 2020 television line on March 10th. The South Korean TV maker said it was beginning the rollout of its 2020 TV lineup this month in South Korea and the United States, followed shortly by Europe and other regions. Products will include 14 OLED models plus “real 8K” ZX models and 4K Ultra HD TVs.
Sony, too, previously began the rollouts of its X950H and X800H 4K Ultra HD LED-LCD TV lines for 2020. In addition, it is carrying over several higher-end 2019 Master Series models, which are already in stores.
As for the China-based suppliers, China-based Hisense stated that “domestic divisions have reopened with production activities already underway, and our suppliers have reopened successively in accordance with local policies. As a global brand, Hisense also has factories in Europe, Mexico, and Africa and is coordinating global production to ensure supply of current and new products. Currently we do not expect any changes in pricing or extensive product delays for new models.”
For North America, Hisense maintains final assembly operations for televisions in Mexico, partially as a hedge against tariffs on China-delivered goods. This also helps to shorten turnaround and delivery to market time.
Another China-based TV maker, Konka, which is preparing to re-launch televisions under the Konka brand after a hiatus of several years, is advising new retail accounts to prepare for television deliveries in June.
“We are on target,” Scott Ramirez, Senior Vice President of Sales and Marketing, Konka North America, told us. “We are unfortunately seeing cost increases — mostly panel based — but we are within 30 days of our orignal (North American) launch plans.”
Like Hisense, Konka performs SKD (Semi Knocked Down) TV manufacturing in China and final assemby in Juarez, Mexico.
Ramirez said the giant China-based electronics manufacturer was in shut-down mode briefly at the time the country extended its national holiday, but all is back and running.
Konka expects its first product deliveries for the North American market in June. The initial allotment will include step-up and mid-range LED-LCD U5 series 43- to 75 inches aimed at mainstream consumers and quantum dot-based LED-LCD TVs in the Q7 Series, 50- to 75 inches. Konka continues with plans to ship other series including its higher-end 4K OLED TVs coming in September, Ramirez said.
He added there was no need for any deviation in plans or programs for retail customers, because this is the company’s (re-launch) of Konka-branded televisions under a locally directed sales and marketing team working for Konka. Ramirez said that there was no disruption in Konka’s retail supply chain since it hadn’t begun yet.
“Time will tell if this has any impact on our pricing,” Ramirez said. “We’ve seen some cost increases on our end but so far we have not passed that along.”
Echoing Gagnon’s recollection of the cocooning imapact in 2008, Ramirez recalled the sales activity for televisions following the 911 attack.
“Actually, TV sales went up back then,” Ramirez said. “People didn’t want to go out and wanted to be happier at home. So, [COVID-19] could end up increasing people’s spend on things like televisions.”
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By Greg Tarr
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