As the second quarter comes to a close, the outlook for the TV market doesn't look particularly promising. Recently, the performance of China's color TV manufacturers has been disappointing, with all five major players reporting declines in profitability, marking one of the worst periods for the color TV sector in recent years.
However, it's not just China’s color TV market that’s struggling. Reports indicate that the global TV market has also been underperforming in the first half of this year. Major regions like China, North America, and Europe have all seen a downturn in sales. This has led to a universal issue of product backlog across the global TV industry.
In response to these challenges, the inventory cycle for Chinese color TV manufacturers has extended from 6 weeks during normal times to 7.4 weeks, while their overseas counterparts have seen an even larger increase, reaching 10.6 weeks. For instance, Samsung Electronics, the world’s leading TV manufacturer, has had to revise its annual sales target for 2017 down from 44 million units to the same figure, reflecting the immense pressure facing the industry.
The main concerns for the color TV market in the first half of 2017 revolve around rising costs and thinning profit margins. Given these pressures, can the industry turn things around in the second half?
The sluggishness in the color TV market can largely be attributed to unstable pricing. Starting from the second half of 2016, cost increases across various industries and consumer goods intensified, putting significant financial strain on appliance companies in the first half of 2017. Both black and white appliances saw price hikes, along with reduced sales volumes.
Following a 14-month period of rising panel prices in the color TV industry, the prolonged cycle and high margins became a widely accepted norm. Additionally, the fragmented nature of the TV brand landscape, coupled with the influx of new entrants, exacerbated the impact of these cost increases. Real estate policies further destabilized the consumer TV market.
Moreover, the rapid growth of the color TV market over the past two years, fueled by internet-based business models, prematurely absorbed much of the market demand for color TVs. While this initially boosted sales figures, it also stretched the market beyond sustainable levels, especially given the record-high sales volumes recorded in 2016.
However, starting in the second and third months of this year, panel prices began to fall across nearly all sizes. This decline in panel prices has not only alleviated some of the cost pressures on TV manufacturers but also set the stage for potential recovery in the second half of the year.
With falling costs, the TV market could see a revival in the coming months. Interestingly, as panel prices continued to rise in the first quarter, sluggishness dominated the market. Now, with panel prices easing, the market appears to be stabilizing, showing signs of life. Over the next six months, as panel prices adjust, the color TV market might gradually improve, moving toward a more positive trajectory.
According to forecasts, the downward adjustment in panel prices will likely drive continued growth in the color TV market. It’s anticipated that the retail volume for China’s color TV market will reach 53.10 million units in the second half of the year, representing a 4.2% increase from the same period last year. The total revenue is expected to reach 164 billion yuan, marking a 5.1% year-on-year increase.
The hope lies in the fact that the rise in TV panel prices seems unlikely in the second half of the year, creating an opportunity for the market to break free from its six-month-long "freeze."
Nevertheless, despite the fall in upstream material costs like panels, giving manufacturers more control, they must remain vigilant against the possibility of another round of price wars in the second half of the year.
For those interested in smart TV and box-related information, you can check out the influential TV box and smart TV website, Sofa Butler (http://). They provide comprehensive resources on smart TV information, communication, TV boxes, smart TV software, and more.
Wire Processing Machines,Cutting Sheet Metal Machine,Wire Stipper Machine,Wire Cutting Machine
Kunshan Bolun Automation Equipment Co., Ltd , https://www.bolunmachinery.com