Analysts Continue To Revise Down Outlook For 2020 Television Market
The alarming escalation in the infection rate of the COVID-19 virus pandemic caused television market research firm Omdia (a.k.a. IHS Markit) to recently revise downward its forecasts for global television unit shipments during full-year 2020, but things could still get worse before they get better.
According to an advisory recently sent out by the firm, the previously revised forecasts for 2020 global TV unit shipments showed a cut of nearly 10 percentage points, creating an “unprecedented demand plunge spurred by government mitigation efforts in many countries,” the advisory said. The company warned that the rapidly changing nature of the crisis could generate further revisions as needed.
As we previously reported, Omdia recently advised its 2020 global television shipment outlook shows an expected global shortfall of 8.7% for the year, declining to 203.5 million units, from 222.9 million units in 2019. Omdia previously forecast 2020 shipments would rise by 1.1 percent to reach 225.4 million units for the year. The revised forecast for 2020 now represents a 9.8% downswing in the shipment forecast for the year.
“The global television market is experiencing a shocking reversal of fortune,” stated Paul Gray, Omdia research director, for consumer devices. “Just one month ago, things were looking up for TV sales, with 2019 having ended on a hopeful note and all indications pointing to mild television shipment growth in 2020. However, that hope has completely evaporated during the past month as concerns about supply interruptions have been eclipsed by rising industry anxiety over a coronavirus-driven demand crash.”
Omdia attributed the revised forecasts directly “to government mandates in countries all over the world to restrict individual movement. These restrictions represent a major disruption to consumers’ normal lives and customary shopping habits.”
At the same time, the suspension of the normal sport calendar—in particular the postponement of the 2020 UEFA European Football Championship and the Tokyo 2020 Summer Olympic Games—has put much of the promotional activity in the television business on hold.
“At a regional level, annual declines in television shipments of more than 10 percent are not that unusual,” Gray said. “During the past 12 years there have been a dozen such regional events. What’s unprecedented is these declines now are happening everywhere simultaneously due to global government action. This phenomenon has never been seen in the history of the TV market.”
Much of the meltdown is expected to result in the second quarter, Omdia reports, after TV brands began receiving order cancellations from retailers that started in the beginning of March. Shipments are set to fall by 16 percent compared to the second quarter of 2019, the firm said.
Regionally speaking, China is still expected to see some recovery in the second quarter, but shipments in Europe and North America are falling at a rate that projects to more than 40%, according to the report.
“Other regions will decline by a smaller margin as they have advance warning to put effective measures in place—avoiding dramatic shutdowns,” Omdia advises.
Overall Omdia assess the 2020 outlook for the television market as “poor.” Although based on historical data analysis, “long-term results show that the television market’s performance is only weakly connected to overall economic performance.”
“Developed markets shrugged off the 2008-2009 recession and television sales still grew solidly,” Gray said. “This is largely because television remains good value entertainment—far cheaper than going out. However, it’s certainly true that emerging countries’ TV markets are tied to the broader economy,” Omdia said. “We have already seen some anecdotal evidence that some consumers purchased TV sets before undergoing isolation measures. Omdia also expects that a flurry of rescheduled sports events in 2021 will boost television sales.”
In the United States, the crisis caused the postponement of the annual summer CE Week show in New York City — the scheduled site of the 2020 TV Shootout conducted by Scarsdale, N.Y.-based retailer Value Electronics. CE Week was to have taken place this June in the Jacob Javitz Convention Center. However, the center was recently commandeered as an emergency hospital site for escalating numbers of the seriously infected.
Robert Zohn, proprietor of Value Electronics, said “we are converting our a/v showroom into the 2020 TV Shootout for side-by-side evaluation of the premium new TVs and as the 2020 flagship TVs arrive we’ll be mounting them on our store’s TV Shootout wall.”
Zohn said if things don’t get better by the end of the summer “we may just have our panel of expert judges and top professional presenters and a few enthusiasts [come into the store] so we can safely produce our 2020 TV Shootout.” If the Shootout takes place, Value Electronics will again webcast the event for curious enthusiasts.
“We will put health and safety above all and our store can accommodate up to 20 people and keep the recommended 6-foot minimum distances. The judges will still be able to get close to the TVs, but one at a time,” Zohn said.
Health advisories permitting, Zohn said he would like to invite vistors in small groups to see the TV shootout wall in person at his Scarsdale, N.Y. shop. Stay tuned.
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By Greg Tarr
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