Boob Tube Saturation: After TV Sales Decline Worldwide, Will Price Drops Follow?

  • Share
  • Read Later
Ryan McVay / Getty Images

Consumers aren’t falling out of love with their TVs. More likely, they can’t justify replacing the big new TV they purchased not long ago, or they’ve run out of places to put yet another screen.

The TV market hit a wall last year, according to a report from IHS iSuppli. Global shipments of LCD units declined for the first time ever, and all shipments of all TVs dipped by 6.3% compared to 2011. Sales dropped particularly sharply in regions that traditionally have the most disposable income, and the biggest appetites for new tech: Japan, Western Europe, and North America. IHS analysts expect TV sales to remain flat for a couple more years, before creeping upward in 2015.

And why have TV sales fallen? The report suggests that part of the reason is that consumers already have their fill of TVs after scooping up new units in recent years:

In North America, the decline was caused by a mixture of economic factors and by the fact that consumers had increased their demand in 2010 and 2011. By 2012, however, buyers had expended their disposable income for television purchases.

(MORE: Analyst Says 60-Inch Apple iTV to Launch This Year)

“Developed markets have become saturated with flat-panel televisions,” said IHS analyst Tom Morrod.

A recent NPD DisplaySearch study likewise noted that global LCD shipments dropped for the first time ever last year, with demand declining especially prominently in Japan and Western Europe. TV saturation isn’t the only factor that’s led to weak sales. TV prices haven’t been especially good, as electronics manufacturers have been more reluctant to resort to the deep levels of discounting seen during the peak Great Recession years.

“Economic conditions certainly had an impact on demand, but a very mild price erosion also played a role,” said Paul Gagnon, NPD’s Director of global TV research. Average prices for flat-panel TVs fell just 2% in 2012, according to Gagnon, compared to a 5% drop in 2011 and declines in excess of 10% the year before. It’s not that prices are all that high — it’s just that consumers have quickly grown accustomed to rapidly declining prices, and what they see lately doesn’t excite them.

(MORE: TV Prices Shrink, Yet Average TV Purchase Costs More)

Even so, it looks like right about now is a decent time to hunt for bargains on TVs—large-screen TVs in particularly. The price-tracking site dealnews recently noted that prices for big HDTVs (55″ and 60″) have been “at or very near all-time lows.” In several cases, prices have been within a few bucks of the best deals offered on Black Friday 2012.

And if the demand for new TVs remains flat, consumers can be assured more discounting will follow.