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Televisions - US - January 2011

Despite the recession, the television market has enjoyed steady growth in unit volume as flat panels reached mainstream adoption over the last five years. However, stalling momentum in 2010 suggests that macroeconomic forces are finally catching up to the industry. Manufacturers are under pressure to generate new sources of premium (eg 3DTV) and will need to gauge consumer appetites carefully to invest in the right technologies.

In this exclusive report, Mintel takes a look at the innovations and consumer attitudes that shape the intensely competitive dynamics of the TV industry.

Analysis and insights offered include:

  • Where LCD and plasma technology is headed
  • Why 3DTV isn’t working and what might fix it
  • Which demographics specific brands are targeting
  • How distribution channels can be used strategically
  • How many consumers are still in the market
  • What motivations drive current purchases
  • How much a brand name is worth
  • Which value-added features consumers will pay extra for

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Data sources
          • Sales data
            • Consumer survey data
              • Advertising
                • Abbreviations and terms
                  • Abbreviations
                    • Terms
                    • Executive Summary

                      • LCD flat panels dominate TV market
                        • Time spent on TV faces challenges from internet and box office
                          • Dramatic price decreases drive mainstream adoption of flat panels
                            • Manufacturers look to 3D and TV apps for premium
                              • Rise of disruptive technology shuffles brand dominance
                                • CE chains and mass merchandisers are key strategic channels
                                  • Leading brands further segment the under-45 demographic
                                    • Innovations focus on improving 3DTV and TV apps
                                      • Household income is greatest determinant of flat-panel ownership
                                        • Decision-makers see less differentiation among brands
                                          • Picture quality more of an issue for under-35s and the family demographic
                                            • Significant minority will buy an unfamiliar brand to save money
                                              • Interest in paying for extra TV functionality is low
                                              • Insights and Opportunities

                                                • Upgrades around the house are a large component of demand
                                                  • Green positioning makes premium price points easier to swallow
                                                    • Dads are more receptive to TV product marketing
                                                    • Inspire Insights

                                                        • Trend—That’s (Home) Entertainment!
                                                        • Market Size and Forecast

                                                          • Future growth rests on adoption of higher-margin technologies
                                                            • Sales and forecast
                                                              • Figure 1: U.S. factory sales and forecast of televisions, at current prices, 2006-12
                                                              • Figure 2: U.S. factory sales and forecast of televisions, at inflation-adjusted prices, 2006-12
                                                          • Market Drivers

                                                            • Price promotions trump slump in consumer confidence
                                                                • Figure 3: Changes in unit price and unit volume of LCD and plasma flat-panel TVs, 2007-10
                                                              • Cautious consumers looking for low-cost upgrades
                                                                  • Figure 4: Characteristics of televisions owned, 2006-10
                                                                • 3D technology fails to inspire new purchases
                                                                  • Lack of content
                                                                    • Internet-based TV apps expand functionality
                                                                      • End of analog transmission makes older tube TVs obsolete
                                                                      • Competitive Context

                                                                        • Internet-delivered content draws viewers away from TV
                                                                          • Internet on the TV
                                                                            • Movie theaters increase bang for the buck
                                                                            • Segment Performance

                                                                              • LCD increases dominance over older technologies
                                                                                • Sales by segment
                                                                                  • Figure 5: U.S. factory sales of televisions, by type, 2008 and 2010
                                                                                  • Figure 6: U.S. factory sales of televisions, by type, 2006-12
                                                                              • Segment Performance—LCD Flat Panel

                                                                                • Newer LED models help stem declining average unit prices
                                                                                  • LCD flat-panel sales and forecast
                                                                                    • Figure 7: U.S. factory sales and forecast of LCD flat-panel TVs, at current prices, 2006-12
                                                                                    • Figure 8: U.S. factory unit sales of LCD flat-panel TVs, at current prices, 2006-10
                                                                                • Segment Performance—Plasma Flat Panel

                                                                                  • Plasma continues slide but sees boost from value segment
                                                                                    • Plasma flat-panel sales and forecast
                                                                                      • Figure 9: U.S. factory sales and forecast of plasma flat-panel TVs, at current prices, 2006-12
                                                                                      • Figure 10: U.S. factory unit sales of plasma flat-panel TVs, at current prices, 2006-10
                                                                                  • Segment Performance—Front Projection

                                                                                    • Price drops most dramatic for front projectors
                                                                                      • Front projection sales and forecast
                                                                                        • Figure 11: U.S. factory sales and forecast of front projection TVs, at current prices, 2006-12
                                                                                        • Figure 12: U.S. factory unit sales of front projection TVs, at current prices, 2006-10
                                                                                    • Segment Performance—Digital Rear Projection

                                                                                      • Rear projection maintains price points with niche appeal
                                                                                        • Digital rear projection sales and forecast
                                                                                          • Figure 13: U.S. factory sales and forecast of digital rear projection TVs, at current prices, 2006-12
                                                                                          • Figure 14: U.S. factory unit sales of digital rear projection TVs, at current prices, 2006-10
                                                                                      • Leading Brands

                                                                                        • Korean brands ascend while former leaders lose share
                                                                                          • Figure 15: Ownership of leading television brands, 2006-10
                                                                                        • Sony carries most brand equity but outsold by Samsung and LG
                                                                                          • Vizio represents power and danger of competing on price
                                                                                            • Figure 16: Desirability of leading television brands, October 2010
                                                                                        • Innovation and Innovators

                                                                                          • 3DTV continues to evolve
                                                                                            • 3D without glasses
                                                                                              • Passive 3D glasses
                                                                                                • Twin View touch remote control acts as mobile device
                                                                                                  • CES 2011—New TV models offer thinner bodies and even greater internet convergence
                                                                                                    • Samsung
                                                                                                      • Vizio
                                                                                                        • Sony
                                                                                                          • LG
                                                                                                            • Panasonic
                                                                                                            • Marketing Strategies

                                                                                                              • Overview
                                                                                                                • Figure 17: Adspend of leading television brands, 2008 and 2009
                                                                                                              • Television advertising
                                                                                                                • Samsung
                                                                                                                  • Figure 18: Samsung 3D LED TV—Aquatic living room, television ad, March 2010
                                                                                                                  • Figure 19: Samsung 3D LED TV—Soccer fanatics, television ad, June 2010
                                                                                                                  • Figure 20: Samsung apps platform—New York couple, television ad, October 2010
                                                                                                                • LG
                                                                                                                  • Figure 21: LG Infinia Series—The End, television ad, May 2010
                                                                                                                • Vizio
                                                                                                                  • Figure 22: Vizio televisions—Beyoncé competes, television ad, November 2010
                                                                                                                • Sharp
                                                                                                                  • Figure 23: Sharp Aquos—Quattron technology, television ad, March 2010
                                                                                                                • Toshiba
                                                                                                                  • Figure 24: Toshiba Cinema Series—Woman in car, television ad, October 2010
                                                                                                                • Online advertising
                                                                                                                  • Standout websites incorporate visual sophistication and social media
                                                                                                                    • Point of sale advertising
                                                                                                                      • National events and tours give consumers a chance to experience 3D
                                                                                                                      • Retail Distribution

                                                                                                                        • Chain electronics stores and mass merchandisers instrumental in channel strategies
                                                                                                                          • Chain electronics stores
                                                                                                                              • Figure 25: Where home theater hardware is purchased, by household income, October 2010
                                                                                                                            • Best Buy helps Sony implement uniform consumer messaging
                                                                                                                            • Ownership and Intent to Buy

                                                                                                                              • Household income determines likelihood of flat panel ownership
                                                                                                                                • Figure 26: Penetration of TV technologies and large screen size, by key demographics, October 2009-June 2010
                                                                                                                              • Respondents may favor secondary flat-panel upgrades over newest tech
                                                                                                                                • Figure 27: Ownership of and intent to buy types of TVs, October 2010
                                                                                                                              • Two thirds of respondents have purchased a TV in the last four years
                                                                                                                                • Figure 28: Timing of last TV purchase, by household income, October 2010
                                                                                                                            • Decision Factors

                                                                                                                              • Decision-makers more likely to weigh technicalities and see less differentiation
                                                                                                                                • Figure 29: Considerations in the purchase decision, October 2010
                                                                                                                              • Highest earners more likely to compare technicals
                                                                                                                                • Figure 30: Considerations in the purchase decision, by household income, October 2010
                                                                                                                            • Attitudes toward Televisions

                                                                                                                              • Positioning as upgrades may benefit small to medium screen sizes
                                                                                                                                • Figure 31: Attitudes toward televisions, October 2010
                                                                                                                              • Boomers want upgrades as much as under-35s
                                                                                                                                • Figure 32: Attitudes toward televisions, by age, October 2010
                                                                                                                              • Family demographic less satisfied with picture quality
                                                                                                                                • Figure 33: Attitudes toward televisions, by presence of children, October 2010
                                                                                                                            • Attitudes toward Price Points

                                                                                                                              • Consumers willing to save on brand but spend on green
                                                                                                                                • Figure 34: Attitudes toward price points, October 2010
                                                                                                                              • Willingness to try unfamiliar brands not limited to lower earners
                                                                                                                                • Figure 35: Attitudes toward price points, by household income, October 2010
                                                                                                                              • Family demographic more likely to buy more expensive models
                                                                                                                                • Figure 36: Attitudes toward price points, by presence of children, October 2010
                                                                                                                            • Other Uses of the Television

                                                                                                                              • New functionalities for TV unlikely to justify premium
                                                                                                                                  • Figure 37: Interest in new functionalities of internet-enabled TVs, October 2010
                                                                                                                              • Digital Streaming Services

                                                                                                                                • Strong interest in Netflix reflects consumer attraction to value plays
                                                                                                                                    • Figure 38: Usage of and interest in streaming content sources, October 2010
                                                                                                                                  • Under-35s show early interest but Netflix spreading to older users
                                                                                                                                    • Figure 39: Usage of and interest in streaming content sources, by age, October 2010
                                                                                                                                  • Respondents currently in the marketplace are more likely drawn to Netflix and Amazon on Demand
                                                                                                                                    • Figure 40: Interest in streaming content sources, by intent to purchase, October 2010
                                                                                                                                • Impact of Race and Hispanic Origin

                                                                                                                                  • Key points
                                                                                                                                    • Asian respondents more likely to be early adopters
                                                                                                                                      • Attitudes toward price points
                                                                                                                                        • Figure 41: Attitudes toward price points, by race and Hispanic origin, October 2010
                                                                                                                                      • Desirability of leading brands
                                                                                                                                        • Figure 42: Desirability of leading television brands, by race and Hispanic origin, October 2010
                                                                                                                                      • Attitudes toward televisions
                                                                                                                                        • Figure 43: Attitudes toward televisions, by race and Hispanic origin, October 2010
                                                                                                                                      • Streaming content sources
                                                                                                                                        • Figure 44: Usage of and interest in streaming content sources, by race and Hispanic origin, October 2010
                                                                                                                                    • Cluster Analysis

                                                                                                                                        • Searchers
                                                                                                                                          • Demographics
                                                                                                                                            • Characteristics
                                                                                                                                              • Opportunity
                                                                                                                                                • Technicals
                                                                                                                                                  • Demographics
                                                                                                                                                    • Characteristics
                                                                                                                                                      • Opportunity
                                                                                                                                                        • Off-brands
                                                                                                                                                          • Demographics
                                                                                                                                                            • Characteristics
                                                                                                                                                              • Opportunity
                                                                                                                                                                • Cluster characteristics
                                                                                                                                                                  • Figure 45: Television clusters, October 2010
                                                                                                                                                                  • Figure 46: Attitudes toward price points, by television clusters, October 2010
                                                                                                                                                                  • Figure 47: Considerations in the purchase decision, by television clusters, October 2010
                                                                                                                                                                  • Figure 48: Attitudes toward televisions, by television clusters, October 2010
                                                                                                                                                                • Cluster demographics
                                                                                                                                                                  • Figure 49: Television clusters, by gender, October 2010
                                                                                                                                                                  • Figure 50: Television clusters, by age, October 2010
                                                                                                                                                                  • Figure 51: Television clusters, by household income, October 2010
                                                                                                                                                                  • Figure 52: Television clusters, by race and Hispanic origin, October 2010
                                                                                                                                                                • Cluster methodology
                                                                                                                                                                • Custom Consumer Groups

                                                                                                                                                                  • Within family households, dads make a better target than moms
                                                                                                                                                                    • Intent to buy
                                                                                                                                                                        • Figure 53: Intent to buy types of TVs, by gender and presence of children, October 2010
                                                                                                                                                                      • Decision factors
                                                                                                                                                                          • Figure 54: Considerations in the purchase decision, by gender and presence of children, October 2010
                                                                                                                                                                        • Other uses of the TV
                                                                                                                                                                          • Figure 55: Interest in new functionalities of internet-enabled TVs, by gender and presence of children, October 2010
                                                                                                                                                                        • Streaming content services
                                                                                                                                                                          • Figure 56: Usage of and interest in streaming content sources, by gender and presence of children, October 2010
                                                                                                                                                                        • Desirability of leading brands
                                                                                                                                                                          • Figure 57: Desirability of leading television brands, by gender and presence of children, October 2010
                                                                                                                                                                      • Appendix—Other Useful Consumer Tables

                                                                                                                                                                        • Decision factors
                                                                                                                                                                          • Figure 58: Considerations in the purchase decision, by gender, October 2010
                                                                                                                                                                          • Figure 59: Considerations in the purchase decision, by age, October 2010
                                                                                                                                                                        • Attitudes toward price points
                                                                                                                                                                            • Figure 60: Attitudes toward price points, by age, October 2010
                                                                                                                                                                          • Desirability of leading brands
                                                                                                                                                                            • Figure 61: Desirability of leading television brands, by household income, October 2010
                                                                                                                                                                        • Appendix—Trade Associations

                                                                                                                                                                          Companies Covered

                                                                                                                                                                          • Advanced Television Systems Committee
                                                                                                                                                                          • Blockbuster USA
                                                                                                                                                                          • Consumer Electronics Association
                                                                                                                                                                          • Cyber Security Industry Alliance
                                                                                                                                                                          • Google, Inc.
                                                                                                                                                                          • Hitachi (USA)
                                                                                                                                                                          • Incos Ltd
                                                                                                                                                                          • LG Electronics Inc (USA)
                                                                                                                                                                          • Logitech Inc.
                                                                                                                                                                          • Macy's, Inc.
                                                                                                                                                                          • Microsoft USA
                                                                                                                                                                          • National Association of Theater Owners (NATO)
                                                                                                                                                                          • National Basketball Association
                                                                                                                                                                          • Nebraska Furniture Mart, Inc.
                                                                                                                                                                          • Netflix, Inc.
                                                                                                                                                                          • Panasonic Corporation of North America
                                                                                                                                                                          • Samsung Electronics (USA)
                                                                                                                                                                          • Sanyo North America Corporation
                                                                                                                                                                          • Sony Corporation of America
                                                                                                                                                                          • THOMSON (RCA)
                                                                                                                                                                          • Toshiba Corporation (USA)
                                                                                                                                                                          • U.S. Bureau of Labor Statistics
                                                                                                                                                                          • Walmart Stores (USA)
                                                                                                                                                                          • Yahoo! Inc

                                                                                                                                                                          Televisions - US - January 2011

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