Flat Panels: Philips & LG Q&A

PH - Paul Hobden, marketing director, Philips TV
GM - George Mead, marketing manager digital display at LG Electronics

How were flat screen sales in 2008? Will 2009 be any different from 2008 in that regard?

GM - The TV market has actually performed better than other consumer electronics' products. It has experienced a volume increase of 21 per cent and a value increase of 4 per cent (January - October 2008) compared to the same period in 2007.
Excitingly for us, LG is the fastest growing brand in the LCD TV market with 21 per cent growth in LCD volume for the same period. 
Forecasts indicate that the growth in volume will be smaller in 2009, with a 5-10 per cent increase from 2008.  Smaller growth in volume between 2008 and 2009 is indicative of the market becoming commoditised.
The increasing availability of high definition content appears to be one of the main drivers behind consumer awareness and interest in the technology, fuelling the demand for flat screens.
Additionally, by value, there are new technologies on the horizon such as OLED, and LED backlight, which have the potential to boost the value of the HDTV market in the coming years.

PH - Volume and even value have shown growth overall for this year but we expect the market to be under pressure throughout the last quarter of 2008 and into 2009, when the market will either level out or possibly go in to gentle decline.
This is a combination of the current economic climate and the fact that the Flat TV sector is a well established and maturing market, where most people who want a flat screen have already bought into the category.

How have customer requirements changed over the last couple of years? More interactivity? Smaller bezels? Lower power consumption?

PH - 1080P Full HD panels are now expected on all sets at 37 and above; and are already starting to take a slice of the 32in market - Philips has recently introduced the 32PFL9613D which is a high spec 32in 1080P model.
Increased connection of the sets is also becoming important and Philips has been a leading exponent with of the all 9000 series sets featuring: 4 HDMI, VGA connector, USB socket and a DLNA certified Ethernet port.
Consumers are also increasingly worried about the effect of their product on the environment, and consumer electronics are not exception. Devices which use less power both when in use or in standby are now in demand. The latest range of Philips TVs are exceptional in both regards. For example, the 42PFL5603D Eco TV regularly consumes less power than a 100watt light bulb, in part thanks to intelligent, dimmable backlight technology which lowers the brightness of the screen in dark environments. Philips 2008 flat panel TVs also use just 0.15 watts of power when in standby.

GM - The Credit Crunch has had a direct impact on customer requirements. The market has less disposable income, and as a result, is spending more time at home.
As the market constricts and consumer confidence dips, individuals are spending more money on home entertainment. The TV set is a vital component of home entertainment and greater priority is bestowed on upgrading to the latest technology, including the switch to an HD TV.
Technical breakthroughs such as LED backlit screens and OLED are the future of TV. LG, for example, has integrated an award winning ambient light sensor into some of its leading TVs called Intelligent Sensor. The sensor automatically adjusts to light conditions, and optimises the picture quality whilst saving up to 62 per cent of power consumption.
Aside from technology, design plays a key factor in consumer purchasing choices. With buying habits changing, consumers are seeing the purchase of a good looking TV set in the same vein as that of an expensive piece of art for the home, and not simply just a functional item.

Is HD still a prime force in driving sales?

GM - Definitely. The growth of the TV market in general has been fuelled by HD TV sales. 95 per cent of all TV sales in the UK now carry the HD Ready or 1080p logo, compared to 89 per cent in 2007 (January-October)
Consumers are demanding the highest picture quality and, as a result are opting to purchase Full HD TVs. The market has also seen an exponential increase in HD media production and sales, which ultimately complement the sale of the digital devices.

PH - Until recently the main consumer drivers have been the overall desire to own a flat TV and picture quality, with HD capability as an added bonus. With Flat TV now well established, product design, innovation and the consumer’s overall viewing experience have become key – leading to Philips developing Ambilight and the Aurea TV.  HD performance is important but in the context of overall picture quality which remains a top priority. Philips has introduced a number of technologies in 2008 including the Perfect Pixel HD engine and LED Lux backlighting to guarantee market leading performance.

Is the average screen size still going up in size year-on-year? How big do you see the average screen size getting?

PH - The average size of TVs purchased is increasing year on year, with 37in becoming the norm and the 42in segment becoming very popular.
The major restrictions on the ultimate size of the set are the typical size of the UK home and, for 42in sets and above, whether consumers can wall mount. In fact while nearly half of all large screen owners express a desire to wall mount less than 10 per cent actually do with weight and complexity being the key factors. In response Philips is launching the 42in Essence TV which is not  only incredible slim at just 38 mm wide it is also very light at just 16kg which in combination with the simple ‘smart’ levelling bracket, makes hanging the set a one man – or woman – task.

GM - In my opinion, the focus next year will shift to small screen TVs, predominantly those with a screen size of up to 26in. We have already seen a trade down in screen size in the TV Market. Currently, almost 60 per cent of the market volume consists of 32in and under of which products are under £400, whereas in 2007 it was 47 per cent.

How important is the digital signage industry to flat screen sales? Do you see its importance increasing or decreasing in 2009?

GM - For the past several years, demand for flat screens in the digital signage industry has experienced peaks and troughs. However, the current market expectation for 2009 indicates the potential for strong growth in this sector of the market.
Digital signage screen usage is improving year on year as retailer education increases, more interactive features are incorporated into the devices and content becomes visually more impactful.
Research indicates that the attention span of the average consumer is approximately five seconds, so the success of flat screen sales is largely dependent on the advertising content being produced to complement the TVs. There is strong commitment from LG to launch specific digital signage products, in 2009. TVs with interactive technology, such as 3D, aim to enhance the digital signage market.

PH - n/a