UPDATED! Chinese brand TCL surged to the top of the North American TV market to over take now second-ranked Samsung in unit shipment volume for the first time ever during the first quarter of 2019, according to research from IHS Markit.

The research firm said TCL’s unit shipments to North America boomed by 112% year-over-year in the period.

TCL, which is one of the largest manufacturers of televisions in China, has been steadily moving up the market share charts in the United States and North America for the past several years behind its lines of value-priced smart TVs based on the Roku TV operating system.

According to Paul Gagnon, executive director of television market research for IHS, TCL’s share of North American TV shipments rose to 26.2% during the first quarter of 2019, up from 16% during the same period in 2018. The finding was reported by the IHS Markit TV Sets Intelligence Service.

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Gagnon said this put TCL one position ahead of Samsung, which experienced a shipment share decline to 21.8%, down from 28% one year earlier. Vizio ranked third in North American TV shipments with 13.7% share, IHS reported.

In an official response to our query, TCL told us: “The demand from USA consumers for TCL product overwhelmed our forecast, and therefore, supply in Q4, 2018.  The large number in Q1 was a factor of getting inventory back in-line with our retail partners as well as continuing our growth in Q1 and Q2.  As you may have heard, NPD showed TCL as the #1 selling brand in the USA in March of 2019 and we finished April as a close #2.”

The statement continued: “In addition to our success here in the USA, we have launched our Canadian business to a very hungry Canadian consumer.  The TCL brand has been aggressively embraced to the North and we are confident we will see the same level of success we have in the USA, but in a shorter ramp-up time.  The Q1 IHS data also includes these new Canadian sales where our competitors already had mature businesses.”

Samsung declined to comment on the IHS report.

The market research firm said TCL’s strong performance contributed to a record quarter for the North American TV market, with shipments rising nearly 30% year-on-year to a historic high of 9.3 million units.

Despite TCL’s advance, Samsung maintained its commanding lead in terms of revenue from television sales, accounting for a 36.9% share, more than double the total of any other company, IHS said. Samsung’s revenue leadership reflects its focus on TVs with larger sizes and higher price points, the market research firm said.

“Amid rising concerns about tariffs arising from the U.S. China trade dispute, TCL and other TV brands that rely heavily on China-based manufacturing have been increasing shipments dramatically,” said Gagnon. “As uncertainty mounts around a possible tariff-driven rise in costs, these brands have been bolstering shipments to protect against any potential disruption. Given that margins for TVs are relatively low compared to other consumer-electronics categories, any tariff increase would have a major impact on sales.”

TCL, like Samsung, Vizio and other TV brands, has established assembly operations in Mexico as a means of hedging against U.S. tariffs on Chinese imports, but President Trump’s announced schedule of tariffs Thursday on Mexican imports potentially threatens to raise pricing on most televisions shipped to the United States if the essentially added “tax” is not averted in coming months.

Meanwhile, IHS said TV shipment growth was boosted by an acceleration of retail price erosion, especially for larger sizes. However, the rise in TV shipments in North America was mostly driven by sets with screen sizes smaller than 55-inches.

The erosion in LCD-TV average selling prices (ASPs) in North America reached a high level of intensity in the first quarter, the IHS continued. The first quarter marked the first time that the average price-per-inch of an LCD-TV fell below $10. The overall average price of a 65-inch LCD TV declined to nearly the same level as during the fourth quarter of 2018, when TV prices dropped because of holiday season sales.

The 55-inch average price was near $500, lower than during the fourth quarter of 2018. Amid this high level of LCD-TV ASP erosion, OLED TV shipments have now fallen year-over-year for the second straight quarter, IHS reported.

IHS said worldwide TV shipments recovered in the first quarter, rebounding from a 1.6% decline in the fourth quarter of 2018 to a positive 2.1% growth rate compared with a year prior. The surge in shipment growth was almost entirely due to the surprisingly strong shipment growth in North America, despite very strong increase in the fourth quarter of 2018.

This strong growth offset another quarter of steep shipment decline in China and Latin America.

In China, the world’s largest TV market, Xiaomi remained in first place for the fourth consecutive quarter, reaching a record shipment share of more than 19% in the first quarter. This represents the highest single quarterly market share posted by any Chinese brand in China in more than six years.

Xiaomi achieved this growth through disruptive market pricing and a direct-to-consumer business model that reduces distribution channel costs and passes the savings along to consumers. Xiaomi had the lowest ASP in China of any Chinese TV brand during the first quarter, IHS found.

By Greg Tarr

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