Digital Television - US

The market for digital and high-definition (HD) televisions has finally hit its stride, showing a phenomenal 63% growth in 2006 alone. In this report, Mintel takes a comprehensive look at how adoption of HD technology is progressing and the challenges faced by manufacturers and retailers in maintaining profitability despite booming sales growth. Mintel offers a review of the latest HDTV models from major manufacturers and makes suggestions on how marketers can better reach consumers. Analysis and insights offered include:

• What factors are driving consumers to upgrade their TVs?
• Why have HDTV prices fallen so drastically in such a short time frame?
• Which technologies are hot and which will land on top?
• What new features might boost competing technologies to higher sales?
• Which retailers account for the highest share of HDTV sales?
• Why aren’t major marketers successfully differentiating their brands?

Insights are supported by exclusive Mintel consumer research, which provides perspective into topics such as:

• What percentage of consumers are in the market for a new TV?
• What type and size of TV are most consumers looking for?
• What factors influence the likelihood of an HDTV purchase?
• How much are consumers willing to spend on a TV?
• Which demographics are most attracted to each TV type?
• Are consumers getting smarter about HDTV technology?
• Where are consumers looking for information when they shop?

In addition, the Future and Forecast section of this report enters a discussion on potential means of combating commoditization, along with forecasted sales by segment, including LCD, plasma, RPTV, CRT, and front projection.

Types of televisions covered by this report:

• Flat-panel plasma
• Flat-panel LCD
• Rear-projection TV
• Front-projection TV
• Standard CRT that receive or display digital images (as opposed to analog signals)

Scopes and Themes

What you should know

Definition

Abbreviations and terms

Abbreviations

Terms

Executive Summary

Highlights

Consumers are actively seeking out an enhanced television experience

Price wars are likely to continue

LCD flat-panels carry the momentum of the market

All segments are dominated by well-established technology brands

Mass merchandisers rival electronics stores as TV purchasing destinations

HDTV penetration is increasing but consumer knowledge is not

Online resources serve as a major source of information

Major brand marketing lacks specificity

Future rate of penetration increase will depend on content

Continued growth ahead, particularly for LCD

Market Drivers

Bigger is better

Figure 1: Reasons to buy a TV, March 2007

Figure 2: Sizes of television(s) owned, by year, 2004-06

Figure 3: Attitudes toward TV sets, March 2007

Household income

Figure 4: Distribution of households, by income (constant dollars), 1999 and 2005

Figure 5: Change in number of households per income bracket, 1999-2005

Digital is the law

Widespread distribution keeps products top of mind

Availability of HD content

HDTV for all ages

Figure 6: Growth of the U.S. population, by age, 2002-12

Figure 7: Growth of the U.S. population, by race/ethnicity, 2002-12

Market Size and Trends

Market size

Figure 8: Total U.S. factory sales of digital televisions, at current and constant prices, 2002-06

Market trends

Falling prices

Figure 9: Average factory price per digital television sold, 2002-06

Figure 10: Indexed average unit factory prices of digital televisions, by type, 2002-06

Online price shopping

Market Segmentation

Figure 11: Factory sales of digital televisions, segmented by type, 2004 and 2006

Figure 12: Graph: Factory sales of digital televisions, by type, 2006

Figure 13: Indexed factory sales of digital televisions, by type, 2002-06

LCD

Figure 14: Factory sales of LCD televisions, at current and constant prices, 2002-06

Plasma

Figure 15: Factory sales of plasma televisions, at current and constant prices, 2002-06

Rear projection

Figure 16: Factory sales of rear projection televisions, at current and constant prices, 2002-06

Front projection

Figure 17: Factory sales of front projection television devices, at current and constant prices, 2002-06

Direct view (CRT)

Figure 18: Factory sales of direct view TVs at current and constant prices, 2002-06

Supply Structure

Overview

Product development

Sony Corporation of America

Samsung Electronics Co., Ltd.

Panasonic

Toshiba

Sharp

Other

Advertising and Promotion

Introduction

Figure 19: Media expenditures by leading television manufacturers, 2004-05

Sony (BRAVIA)

Figure 20: Sony BRAVIA—movie trailer advertising clip

Samsung

Figure 21: Samsung NFL—advertising clip

Panasonic

Figure 22: Panasonic plasma—advertising clip

Sharp (AQUOS)

Figure 23: Sharp AQUOS—See More advertising clip

Syntax (Olevia)

Figure 24: Syntax Olevia—LCD TV advertising clip

Retail Distribution

Overview

Figure 25: Graph: Distribution channel share of recent TV purchases, March 2007

Figure 26: Source of purchase of last TV, by named retailer, by age, March 2007

Figure 27: Source of purchase of last TV, by named retailer, by household income, March 2007

Mass merchandisers

Electronics stores

The Consumer

Introduction

Summary

HDTV penetration

Figure 28: Household HDTV penetration, by type and size, 2002-06

Figure 29: Household HDTV penetration, by type and size, by age, Jan-Oct 2007

Figure 30: Household HDTV penetration, by type and size, by household income, Jan-Oct 2007

Figure 31: Household HDTV penetration, by type and size, by presence of children in the household,

Figure 32: Household HDTV penetration, by type and size, by cohort, Jan-Oct 2006

Reasons to buy a TV

Figure 33: Reasons to buy a TV, March 2007

Figure 34: Reasons to buy a TV, by age, March 2007

Other demographic factors

Attitudes toward TV sets

Figure 35: Attitudes toward TV sets, March 2007

Figure 36: Attitudes toward TV sets, by age, March 2007

Figure 37: Attitudes toward TV sets, by household income, March 2007

Other demographic factors

Timing of next TV purchase

Figure 38: Timing of next TV purchase, by age, March 2007

Figure 39: Timing of next TV purchase, by household income, March 2007

Other demographic factors

Anticipated TV purchase; type, size and spend

Figure 40: Anticipated TV purchase; type, size and spend, September 2005 and March 2007

Figure 41: Anticipated TV purchase; type, size and spend, by age, March 2007

Figure 42: Anticipated TV purchase; type, size and spend, by household income, March 2007

Other demographic factors

Levels of consumer knowledge

Figure 43: Levels of consumer knowledge regarding various TV technologies, 2005 & 2007

Other demographic factors

Sources of information

Figure 44: Sources of information used when buying a TV, March 2007

Figure 45: Sources of information used when buying a TV, by age, March 2007

Figure 46: Sources of information used when buying a TV, by household income, March 2007

Other demographic factors

Race/ethnicity

Figure 47: Household HDTV penetration, by type and size, by race/ethnicity, Jan-Oct 2007

Figure 48: Anticipated TV purchase; type, size and spend, by race/ethnicity, March 2007

Figure 49: Sources of information used when buying a TV, by race/ethnicity, March 2007

Future and Forecast

Future trends

Price wars to continue

Fighting commoditization: potential solutions

Focus on retail presentations

Increased specificity in targeting

Spokesmen

Style and content that allow for increased personalization

Technology

Service issues

Commoditization more problematic for retailers than suppliers

A ceiling for screen size

Content plays catch up

Wal-Mart, the electronics chain

The new face of retail

Convergence

Market forecast

Digital televisions

Figure 50: Forecast of total U.S. factory sales of digital televisions, at current and constant prices, 2006-10

Figure 51: Chart: Forecast of U.S. factory sales of digital televisions, by market segments, 2010

LCD televisions

Figure 52: Forecast of U.S. factory sales of LCD televisions, at current and constant prices,

Plasma televisions

Figure 53: Forecast of U.S. factory sales of plasma televisions, at current and constant prices, 2006-10

Rear projection televisions

Figure 54: Forecast of U.S. factory sales of rear projection televisions, at current and constant prices, 2006-10

Front projection televisions

Figure 55: Forecast of U.S. factory sales of front projection televisions, at current and constant prices, 2006-10

Direct view televisions

Figure 56: Forecast of U.S. factory sales of direct view televisions, at current and constant prices, 2006-10

Forecast factors

Appendix: Trade Associations

Appendix: Simmons Cohorts

Figure 57: Married couples cohorts

Figure 58: Single women cohorts

Figure 59: Single men cohorts