Fortune is reporting that the HDTV market is in crisis mode. According to the latest numbers from NPD, worldwide TV shipments fell by 8% year-over-year in Q1 2012, the steepest drop since Q2 2009. Shipments of LCD TV sets fell in Q1 year-over-year for the first time ever. LCD shipments fell over 3% and plasma TV shipments fell 18%, on top of an 8% decline in Q4 2011.
According to the article, thanks to dramatic price drops, everyone who
wants a big-screen TV most likely already has one. According to Paul
Gagnon, NPD DisplaySearch's director of North America TV Research, "At
present we see that 70% to 80% of households have a flat panel set." In
addition, consumers have rejected 3D and connected TVs that were
intended to boost sales. In general, Gagnon says that consumers aren't
replacing their flat-panel TV because they've failed, but rather, because they
want bigger ones. When they go to the store, they see that prices have
dropped, and they can buy a bigger set for the same amount of money
that they spent for their smaller set the last time. Other features
besides screen size are secondary--given the same price, consumers will
go for the bigger set with fewer features, rather than the smaller one
with more features.
Given this environment, what's the market opportunity for Apple's
rumored TV? The company can probably make a go of it with a niche product, but
it's difficult to see Apple being willing to fight for market share
with price-sensitive buyers, which is where the volume is. As much as
Steve Jobs thought that he's "cracked the TV problem," if he were alive
today, he might consider whether HDTVs have become another high-volume,
low-margin business like PCs, from which Apple is weaning itself.