Impacted by shortages of components and high panel prices, this year’s holiday TV promotions and sales are expected to be unremarkable, resulting in a shortfall in global unit shipments over the second half and full year of 2021, market research firm TrendForce predicts.
The industry analyst cut its global shipment forecasts of television sets again, this time by 0.9% , to a forecasted 215 million units for the full year. That’s down from total global TV shipments for 2020 were 217 million units.
The change comes despite the fact that the research from the first half of 2021 indicated that stimulus packages made to many residents sheltering from COVID-19 found TV demand increased in North America over the first six months of the year as TV brands continued to replenish their component inventories.
Over the period, TrendForce said brands adopted a rolling schedule for their TV shipments because their manufacturing operations for TV sets were disrupted by a shortage of panels in 2Q-2021. Global TV unit shipments for 1H-2021 reached 98.45 million units, a 10% year over year increase, TrendForce said.
Furthermore, TrendForce predicts global TV shipments for the second half of the year to decline 8.5% to 117 million units.
“Although supply issues related to TV components have become gradually alleviated in 3Q-2021, TrendForce believes that retail prices of TV sets in the [second half] are unlikely to reach the rock bottom levels previously seen in the [first half] because the massive price hike of TV panels in 1H-2021 had led to a surge in TV manufacturing costs,” the firm said.
Over the course of the first half of 2021, Chinese and Korean TV brands were major beneficiaries of robust TV shipment growth, which included surges in demand for ultra large-sized TVs.
Still, TrendForce said that TV shipment volume for 1H-2021 fell short of prior forecasts by 5.8%, but Samsung Electronics and LG Electronics (the two largest market share holders) comprised more than 20% of total large-sized TV shipments for the first time. As a result their TV shipments for the first half rose above 20.7 million units for Samsung and 14.01 million units for LG.
TrendForce said Samsung’s large-sized (65-inch and above) TV shipments “underwent a staggering 25% year-over-year increase for 1H21. Hence, the two brands’ strategy to eschew profit loss from the surge in panel prices by upgrading their product specs and increasing the shipment of larger-sized products proved to be relatively successful.”
As for their China-based competitors, despite on-going component supply shortages, TCL and Hisense were able to lower manufacturing costs of their TV sets by increasing shipments and adjusting product mixes, TrendForce found.
During the first six months, TCL and Hisense increased their TV shipments by 11.5% and 9.5% year over year, to 11.05 million units and 8.94 million units, respectively. In the process both companies set records for shipment volumes, TrendForce found.
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In particular, 55-inch (and above) TVs accounted for 36.5% and 40.2%, of the 1H21 TV shipment from TCL and Hisense, respectively, meaning they shipped more large-sized TVs in 2021 than in any previous year.
Xiaomi, was the only brand among the top five to see a shipment drop for the period, to 5.52 million units, a 6.6% decline, despite taking a larger share of TV shipments in its domestic China, compared to TCL or Hisense.
“While Xiaomi struggled with rising manufacturing costs due to the persistent price hike of TV panels, Xiaomi’s decline can primarily be attributed to the fact that it failed to attract consumers despite multiple promotional price cuts in 1H21,” TrendForce said.
For the second half, TrendForce expects persistently high prices of TV panels and longer shipping times in Europe and North America to hinder TV sales through the traditional peak selling season.
Among the challenges for TV manufacturers will be contending with higher panel costs and predicted lower demand in Europe and the U.S. as pandemic-related restrictions are lowered.
“From June 2020 to July 2021, prices of 32-inch panels rose by 167%, though retail prices of 32-inch TV sets rose by a mere 30-35%. Similarly, prices of 55-inch panels rose by 120% while retail prices of 55-inch entry-level and mid-range TV sets rose by only 20-25%, with high-end TVs even experiencing a price drop,” TrendForce said.
“In other words, promotional price cuts taking place during peak season sales this year are unlikely to be remarkable and result in noticeable sales performances,” the firm said. “Although third quarters have traditionally marked the start of the peak sales season and hence a period of component procurement for TV brands, retail availability of end-products, such as TV sets, was delayed by three to four weeks this year due to port congestion taking place across the globe, which indirectly led to a decline in TV brands’ procurement activities for Europe and North America.”
Peak season sales, in turn, will likely be relatively muted this year in view of an increase in TV manufacturing costs and lengthened shipping times, according to the report.
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By Greg Tarr
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