Flat-panel TVs to set dubious record this year

Mark 2012 on your calendar. According to IHS, it will be the end of an era for flat-panel TVs and the beginning of a new one — the first year the stalwart industry will post a decline in shipments.

The market researcher expects LCD, plasma and rear-projection TV shipments in total to fall from 39.1 million in 2011 to 37.1 million by the end of the year. Not a huge drop, but one that will continue for at least the next three years, claims Lisa Hatamiya, TV research analyst, IHS.

By 2015, she believes flat-panel TV shipments will fall to around 34 million units.

“The U.S. flat-panel television market has never declined on an annual basis, even at the height of the recession in 2008 and 2009,” said Hatamiya. “Sales in the United States now are being driven by consumers who are replacing their older flat-panel sets with new models boasting more advanced features. This contrasts with developing regions of the world where vibrant, untapped markets remain for buyers making their first-ever purchase of flat-panel sets.”

Hatamiya blamed the turnabout in part on overly enthusiastic manufacturers who boosted shipments early last year under the assumption consumers would snatch up new TV models en masse. Unfortunately, the plan backfired, leaving too many sets on shelves while customers held off on splurging. This “negative chain reaction” resulted in drastic price cuts during the holiday season — good news for consumers, but putting vendors in a sticky spot.

“These price cuts hurt profits horribly across the board for almost every vendor,” Hatamiya said, though added that the industry will still see a profitable year thanks to fewer discounts.