U.S. LCD TV market could record its first annual decline in 2010

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The U.S. LCD television market is expected to end up shipping fewer TVs this year than last, resulting in the first annual decline since the display technology debuted in 2006, according to a research firm.

The economic weakness and a year of slow price declines have led to retailers selling fewer and manufacturers shipping fewer TVs this year than last, according to a report from the iSuppli research firm.

The research firm is expecting a total of about 31.9 million LCD TVs shipped in 2010, down 1.2% from 32.3 million in 2009.

A decline of 1.2% may seem insignificant, but if things turn out as iSuppli is forecasting, it would mark the first time annual shipments of LCD TVs haven’t increased year-over-year.

The decline would be a reversal for what has been a steadily growing market for consumer electronics makers, iSuppli analyst Riddhi Patel said in a statement.

‘Year after year, in both good economic times and bad, U.S. consumers always have found a way to devote more of their disposable incomes to purchasing sleek, new flat-panel LCD TVs,’ Patel said in her statement. ‘However, in 2010, the realities of the economy finally caught up with the LCD market.’

Unemployment stayed high and consumer confidence remained low in 2010 and LCD prices didn’t decline fast enough to bring consumers into stores to buy TVs, iSuppli said.

LCD TV makers also shifted strategy in 2010, moving away from the traditional market-growth approach of cutting prices to stimulate sales and toward a tactic of adding more features to TV sets, such as LED backlighting, built-in Internet access and 3-D displays, iSuppli said. That strategy, so far it would seem, hasn’t been as effective in growing sales as price cuts were, the firm said.

Other consumer electronics items -- including Apple’s popular iPad tablet computer, e-book readers and portable media players -- all vied for the same discretionary income that LCD TVs did, Patel said in the statement.

While the U.S. market is expected to show an annual decline, the global LCD TV market will continue to expand in 2010, rising by 20.3%, iSuppli said.

‘The global LCD TV market continues to grow on the strength of emerging markets like China, parts of the Asia Pacific region and Latin America,’ Patel said. ‘These regions are seeing strong growth as LCD TVs become more affordable.’

Despite the projected shipment setbacks in the U.S. this year, Patel and iSuppli are expecting only a one-year dip.

‘Shipments will resume their growth in 2011 as consumer confidence rises again,’ Patel said in the statement.

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-- Nathan Olivarez-Giles