Sony Rises from #4 to #1 in LCD TVs in Q4'05 According to DisplaySearch Report

Business Wire, Feb 23, 2006

AUSTIN, Texas -- DisplaySearch, the worldwide leader in display market research and consulting and part of The NPD Group, has released Q4'05 worldwide LCD TV shipments and revenues by brand, region, size and resolution. Shipments for 43 different LCD TV brands as well as numerous sub-brands are identified in the latest report.

LCD TV panel shipments, LCD TV sell-in and LCD TV sell-through were all higher than expected in Q4'05 with shipments on a sell-in basis 12% higher than projected, rising 58% Q/Q and 137% to a record 8.6M units. For the year, LCD TV shipments rose 141% to 21.2M units.

LCD TV shipments enjoyed at least 25% Q/Q growth in each region led by China up 74% and Europe growing 73%. Europe had the highest LCD TV demand, reaching a 44% share, up from 40% with North America at 26%, down from 29%.

Most impressive was the rapid growth at larger sizes fueled by lower prices as a growing amount of optimized capacity comes online. Shipments of LCD TVs 37" and larger rose 148% in Q4'05 to over 1M units, accounting for a 12% share on a unit basis, up from 8%, and a 29% share on a revenue basis, up from 20%. The LCD TV unit share of the 40"-44" TV market nearly tripled from 6% in Q3'05 to 17% in Q4'05, taking share from PDP TVs and CRT RPTVs. In addition, the LCD TV share of the 35"-39" TV market rose from 48% to around 2/3 of the market in Q4'05, taking share from CRT TVs. With larger sizes enjoying the fastest growth, the average LCD TV diagonal grew 5% Q/Q and 21% Y/Y to 26.4".

The rapid gains at larger sizes were made possible by additional 6th and 7th generation TFT LCD capacity optimized for panel sizes 32" and larger as well as severe price and margin competition from an excessive number of brands. As these fabs ramp, yields improve and too many brands battle for shelf space, 32" LCD TV costs and prices are coming down rapidly. For example, average 32" LCD TV prices in Q4'05 fell 16% Q/Q and 51% Y/Y to $1493 and average 37" LCD TV prices dropped 15% Q/Q and 49% Y/Y to $2333. Despite the significant declines in price for individual sizes, blended LCD TV prices were down just 2% Q/Q and 12% Y/Y to $1169 as a result of the rapid gains at larger sizes, resulting in 54% Q/Q and 109% Y/Y revenue growth to $10B. For the year, LCD TV revenues grew 100% to $25.4B.

The largest beneficiary of the move to larger sizes was Sony, jumping from #4 to #1 in both units and revenues due to the successful launch of its new BRAVIA series and optimized panel capacity through its TFT LCD joint venture with Samsung, S-LCD. As shown in Table 1, Sony's unit share surged from 9% to 15% on 164% growth. What makes the unit growth even more impressive was its strong focus at larger sizes with 56% of its output 32" and larger, the highest of any of the top eight suppliers. Sony enjoyed over 900% Q/Q growth at 40" and over 175% growth at 32", enabling it to earn the #1 position in both the 30"-32" and 40"-42" categories. Sony was also #1 in the 26"-27" and 22"-23" markets. As a result of its dominant position at larger sizes, Sony held a 19% to 13% revenue share advantage over Sharp, which had been #1 on both a unit and revenue basis worldwide since the inception of the LCD TV market. By region on a revenue basis, Sony was #1 in North America, overtaking Sharp, and in ROW, surpassing LGE.

Philips, which includes the Magnavox brand, remained #2 in LCD TV unit volume in Q4'05 with a 14% share, down slightly from 15%, on 48% Q/Q growth. Due to a significant emphasis at smaller sizes, it fell from #2 to #4 on a revenue basis. On a unit basis, it remained #1 in North America, but fell to #2 in Europe, behind Samsung. Philips maintained the #1 position in the 15"-19" market worldwide.

Sharp fell from #1 to #3 on a unit basis and from #1 to #2 on a revenue basis due to supply constraints. This was the first quarter Sharp was not #1 worldwide in LCD TV units and revenues since the inception of the LCD TV market. A lack of capacity growth and insufficient external sourcing prevented it from keeping up with market demand. As a result, while it remained #1 in Japan on a unit basis, it fell from #2 to #3 in North America and from #3 to #5 in Europe. By size, it remained #1 worldwide at 10"-14", 20"-21", 35"-39" and 45" , but fell from #1 to #4 at 30"-34".

Table 1 LCD TV Share and Growth

Ranking      Brand                  Q3'05 Share   Q4'05 Share   Growth
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1            Sony                          8.7%         14.6%     164%
2            Philips/Magnavox             15.1%         14.2%      48%
3            Sharp                        18.0%         13.6%      19%
4            Samsung                       9.7%         11.6%      88%
5            LGE                           6.5%          6.5%      56%
             Others                       41.9%         39.5%      49%
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             Total                       100.0%        100.0%      58%
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