Competition in the North American LCD-TV market intensified in the first quarter as the battle for the sales lead tightened up between the top-3 brands, according to iSuppli Corp. Unit shipments for the region's leading brands, Samsung Electronics Co Ltd of South Korea, Sony Corp of Japan and Vizio Inc of the US, were separated by a mere 0.3 of a percentage point in the first quarter, down from 1.8 points in the fourth quarter.
The three companies are engaged in an aggressive pricing battle as they vie to attract the attention of consumers. "Following Vizio's surprise rise to leadership in the North American LCD-TV market in the second and third quarters of 2007 due to its rock-bottom pricing, Samsung and Sony have struck back with their own cuts and new low-cost sets," noted Riddhi Patel, principal analyst, television systems, for iSuppli.
iSuppli said the competitive battle and price cutting among these three companies has mounted pressure on other competitors. "For example, Philips has announced its exit from the US market and has licensed its brand to Funai. iSuppli predicts value brands in the market soon will start to encounter immense competitive pressure from new low-priced LCD-TVs from Sony and Samsung." Patel said.
Beyond price cutting, Samsung has been engaging in a strategy of LCD-TV product differentiation in North America. Examples of this include Samsung's introduction of new sets that incorporate the company's Touch of Color (TOC) concept, which improves picture quality by blending an amber hue into the display bezel frame.
Sony's strategy in North America is focused on price, offering a line of products that are competitively priced with the value brands. Vizio also is maintaining a price-driven strategy, offering value products at value prices.
Samsung dominates LCD-TV sales in the 21- to 24-inch range. Sony leads in shipments of televisions in the 40- to 41-, 45- to 46- and 50- to 54-inch ranges, while Vizio dominates the market in the 25- to 29-, 30- to 34-, 35- to 39- and 47- to 49-inch segments.
As prices plunge, the pace of LCD-TV sales growth in North America is starting to slow. LCD-TV unit shipments in North America are expected to rise by only 26.6% in 2008, reaching 27.4 million units. This will be down significantly from the 88.8% rise in 2007 and the 92.6% increase in 2006.
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