Friday, February 25, 2011

LCD TVs Outsell Plasma TVs In All Size Segments

By Andrew Johnson


LCD TVs are the most popular form of flat screen television, outselling plasma screens across the small medium and large screen size segments of the global television market. LCD is particularly dominant in the small (32 inch and below) and medium (42 inch) segments. The introduction of LED (light emitting diode) backlighting on LCD screens has helped LCD out-compete plasma screens.

During the initial development of flat screen TVs, plasma technology was considered inherently superior to liquid crystal display (LCD) technology. Plasma screens initially dominated the TV market. They produced better contrast control and superior overall image quality.

However, LCD technology has advanced. LED backlighting improves contrast control. Faster LCD screen refresh rates eliminate motion blur during fast action shots. These advances have eroded the plasma technology gap.

From a cost perspective, LCD producers are able to offer televisions at a lower cost compared to plasma producers in the small (32 inch and less) screen market. With lower costs, LCD has a selling price advantage over plasma in the small segment. The advantage is so significant that plasma producers have more or less abandoned this segment, globally.

In the medium size TV segment, a similar competitive situation prevails. LCD dominates the medium niche, albeit less so than the small niche. The medium segment is more competitive and plasma screens more prevalent. Both LCD and plasma suppliers realize only modest selling prices and margins. LCD suppliers have a cost advantage, although not as large as that in the small segment. In short, LCD units out-compete plasma in the medium market segment.

Plasma producers have elected to focus their efforst on the large screen size (50 inches and more) segment. LCD has less cost advantage in this segment. Moreover, consumers are generally less price sensitive and selling prices firmer for both LCD and plasma TVs. The market share of plasma in the large screen size segment was 40.8 percent during 2010 (based on figures produced by global consultancy firm DispaySearch).

Plasma TVs enjoyed fast growth and somewhat of a consumer come-back during 2010. The number of plasma units shipped globally was 15.1 million in 2008. The number decreased slightly to 14.8 million units during 2009. The number increased dramatically by more than 30 percent during 2010 to 19.1 million units. The bulk of that rise was in the large screen size segment and was mainly due to the efforts of Panasonic, the largest plasma flat screen TV producer in the world by far with a 40.7 percent market share.

To recap, the image quality of LCD TVs is now much improved because of LED backlights and quicker screen refresh rates. These advances have lifted LCD image quality closer to plasma. LCD units now outsell plasma units across all screen sizes.




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