Is The Flat-Screen TV Boom Over?

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The consumer electronics trend that had us shuffling out our perfectly good but perfectly bulky CRT televisions in favor of fancy-new flat screens appears to be ebbing. According to research firm IHS iSuppli, U.S. shipments of flat-panel TVs will actually decline for the first time since Fujitsu introduced the first 42-inch plasma display in 1997. And it doesn’t appear as though the now mature product category is in line for returned growth anytime soon.

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IHS forecasts the U.S. flat-panel TV market to decline to 37.1 million units in 2012, down 5 percent from 39.1 million units in 2011. By 2015, the research firm predicts that the American market for these TVs will drop to around 34 million shipments. The flat-panel category includes TVs built around the now-dominant liquid crystal display (LCD) technology, as well as older plasma and somewhat obsolete digital light projection (DLP) technologies.

Driving the forecast, IHS says, is the maturation of the market—most consumers who could afford to swap out their big, bulky TVs in favor of more elegant high-definition flat screens have already done so. That means that in the U.S., most of the purchasing is being conducted by consumers who are replacing an older flat screen.

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“The U.S. flat-panel television market has never declined on an annual basis, even at the height of the recession in 2008 and 2009,” noted Lisa Hatamiya, TV research analyst for IHS. “The decline starting this year suggests that demand may have crested for the mature U.S. TV market. Sales in the United States now are being driven by consumers who are replacing their older flat-panel sets with new models boasting more advanced features. This contrasts with developing regions of the world where vibrant, untapped markets remain for buyers making their first-ever purchase of flat-panel sets.”

Another factor cited by IHS: “irrational exuberance” on the part of TV manufacturers, who glutted the current market by over-projecting demand last year.

Republished with permission from paidContent, which writes about the transformation of the media-and-entertainment industries in the digital era, with a focus on emerging-business models and technologies.

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