By James Wells
DUBROVNIK, CROATIA: GfK Australian and New Zealand MD Gary Lamb today painted such a grim picture for the booming $3.2 billion flat panel TV category that Narta MD Kay Spencer called it, “The biggest wake-up call” for ignorant and complacent retailers.
In his presentation to Narta delegates today, Lamb claimed the $3.2 billion TV market is now larger than the rest of the consumer electronics market combined, at just over $3 billion, and that this is a completely unsustainable market position.
“The TV market over the last few months has become a lot tougher. Volumes in TV are forging ahead, but the prices are in freefall,” said Lamb.
Over the last four years, the average sale price (ASP) of an LCD television has declined by approximately 66 per cent, from $3,000 to just over $1,000, and plasma has already broken below the psychological $1,000 barrier — halving its ASP over the same period.
According to Lamb, the incredible volume of 3 million television units sold in Australia over the last 12 months is not sustainable, as the replacement cycle would have to halve to maintain its current performance, which is unlikely as the upgrade and conversion from CRT has been the primary driver for the growth.
“Even if volumes remain at current levels, the value of the market has already begun to decline,” he said.
Lamb reinforced this point by showing that in the 12 months to June 2010, the value of the TV market was lower than the value for the 2009 calendar year – therefore demonstrating a significant slowdown in the market since the beginning of 2010.
Moreover, private label brands are occupying a significant proportion of the market, with 140 separate companies now measured by GfK data. Lamb delivered worse news for the major brands, with these 140 private labels attracting 32 per cent market share in one 30-day period over the last 12 months.