Thin Margins for Flat Panel TVs Have Brands Looking to Commercial TVs and Digital Signage Segments for Higher Profits

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DisplaySearch, the worldwide leader in display market research and consulting, indicated in its latest Monthly Large Format Commercial Displays Sell Through Report that large size (26"+) products that are self-classified as consumer TVs but shipped through commercial outlets have continued to significantly outpace their commercial-grade counterparts, despite efforts by flat panel display brands to distinguish commercial- and consumer-grade flat panel displays. These displays are used for out-of-home applications including flight information displays, electronic menu boards, board room displays, information kiosks, and command and control centers, as well as digital signage and advertising.

Share of US Sell-though of Large-Format FPD Products in Commercial Channels by Classification

Offering consumer grade TVs as well as a commercial-grade line is a challenge for many major flat-panel brands

DisplaySearch, the worldwide leader in display market research and consulting, indicated in its latest Monthly Large Format Commercial Displays Sell Through Report that large size (26"+) products that are self-classified as consumer TVs but shipped through commercial outlets have continued to significantly outpace their commercial-grade counterparts, despite efforts by flat panel display brands to distinguish commercial- and consumer-grade flat panel displays. These displays are used for out-of-home applications including flight information displays, electronic menu boards, board room displays, information kiosks, and command and control centers, as well as digital signage and advertising.

DisplaySearch's analysis reveals that the percentage of flat-panel displays originally designed for consumer TV, but shipping through commercial channels, is on the rise against commercial-grade displays. A third category, hybrid displays, has been positioned by companies as being appropriate for both out-of-home-commercial use as well as consumer TV. This segment is fading, however, as companies are making a strategic effort to separate their product offerings.

"Offering consumer grade TVs as well as a commercial-grade line is a challenge for many major flat-panel brands," noted Chris Connery, DisplaySearch's Vice President of PC and Large Format Commercial Displays. "Leaders in the commercial space, including household names like Panasonic, Samsung, Sony, Sharp and LG, make an attempt to separate their product portfolio by end market, but many have not created a clear separation in channels of distribution. In some cases, brands actually see this as a strategic move to sell more consumer TVs through higher-margin commercial channels to customers who may be none-the-wiser in terms of distinguishing a commercial-grade display from a consumer-grade product."

Considering the slow economic environment, FPD TV sales remained surprisingly strong in 1H'09 due to continued low price points. The strength in FPD TV sales in the US and China is pushing panel prices up in Q3'09, which many fear will severely impact demand and even eliminate holiday promotional pricing. Brands are thus searching for new markets and channels, beyond fickle consumer channels.

Sell-through data of commercial distributors and resellers clearly shows that some brands have more success in commercial channels with their consumer TVs than with their higher-margin commercial lines, which sets these companies up for internal competition between business units. Other companies have very clear lines between product definitions, and also between marketing and distribution of these products. Indeed some TVs shipping through commercial channels may end up in traditional consumer settings (with distribution in this instance just acting as a fulfillment and logistics mechanism), but data shows that most displays shipped through commercial distribution end up as part of a true commercial installation--potentially cannibalizing sales of a brand's higher margin commercial-grade products.

Full analysis of actual end-market shipments of large-format flat panel displays through commercial outlets down to the SKU level can be found in the DisplaySearch Monthly Large Format Commercial Displays Sell Through Report. This monthly report is the industry's most definitive tool for tracking the sell-through data of both large-size LCD and PDP displays (>26") through commercial US distribution channels. This joint NPD/DisplaySearch product leverages information and expertise from DisplaySearch and the NPD Commercial Technology Group's POS shipment data to cover markets such as digital signage, corporate conference rooms, public transportation, and more. It captures monthly sell-though data from commercial-only agents, and offers quarterly in-depth analysis of trends seen in both the AV and IT reseller and distributor channels.

The DisplaySearch Digital Signage Conference: Flat Panel Displays Go Out-of-Home will take place on September 1 in San Jose, California--bringing together the world's largest flat-panel display vendors and partners with companies already well established in out-of-home environments, as well as brand new start-up companies that this brave new world of digital displays is helping to foster. Confirmed participating companies include HP, Ingram Micro, LG Display, Samsung Electronics America, Scala, National City Media Finance, Horizon Display, GDS, NEC and DisplaySearch. To view the latest agenda and register for the conference visit http://www.displaysearch.com/digitalsignage2009 .

This is part of the DisplaySearch's Fall Conference Series, taking place September 1-3 in San Jose, California. The series also includes these one-day conferences covering the display industry's hottest market segments:

Receive a 20% discount on your registration fee is you register for more than one of our Fall Conferences!

For more information about these conferences and sponsorship opportunities, please contact Laura Castellano at 1.408.226.1101 or laura_castellano(at)displaysearch(dot)com. Media interested in attending the conferences should contact Stacey Voorhees-Harmon at 1.925.336.9592 or stacey(at)savvypublicrelations(dot)net.

About DisplaySearch:
DisplaySearch, an NPD Group Company, has a core team of 57 employees, located in Europe, North America and Asia, who produce a valued suite of FPD-related market forecasts, technology assessments, surveys, studies and analyses. Visit the DisplaySearch blog to read about how our top analysts are interpreting up-to-the-minute issues that impact the display industry, and join us in this discussion about technology and the flat panel industry. The company also organizes influential events worldwide. Headquartered in Austin, Texas, DisplaySearch has regional operations in Chicago, Houston, Kyoto, London, San Diego, San Jose, Seoul, Shenzhen, Taipei and Tokyo, and the company is on the web at http://www.displaysearch.com/ .

About The NPD Group, Inc.
The NPD Group is the leading provider of reliable and comprehensive consumer and retail information for a wide range of industries. Today, more than 1,700 manufacturers, retailers, and service companies rely on NPD to help them drive critical business decisions at the global, national, and local market levels. NPD helps our clients to identify new business opportunities and guide product development, marketing, sales, merchandising, and other functions. Information is available for the following industry sectors: automotive, beauty, commercial technology, consumer technology, entertainment, fashion, food and beverage, foodservice, home, office supplies, software, sports, toys, and wireless. For more information, contact us or visit http://www.npd.com/ and http://www.npdgroupblog.com . Follow us on Twitter: http://www.twitter.com/npdtech and http://www.twitter.com/npdgroup .

Follow DisplaySearch on Twitter at http://www.twitter.com/displaysearch

Media Contact:
Stacey Voorhees-Harmon
Public Relations
Phone: 925-336-9592

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