Chinese TV makers set to challenge Korea's leadership in global TV markets
Chinese TV makers set to challenge Korea's leadership in global TV markets
  • JH Bae
  • 승인 2013.12.16 11:11
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(iTers News) - Shipments of smart TVs have been growing so fast in recent years that they are making up more than half of market demand in some advanced economies like Germany. But, the Internet-connected two way TVs have done less than expected to pump up fresh, new demand in long-idle global TV market. Nor have much-anticipated 3D TVs done so much.

Desperate for a next growth engine that can revitalize slumping TV market, TV makers across the world are pinning their last hope for recovery on a next generation of TV technologies like 4K ultra-HD and OLED TVs.

4K TV(3840×2160) TV Shipment Forecast


Source: NPD DisplaySearch Quarterly Global TV Shipment and Forecast Report

Fed up with the way that they view a little spotty full HD picture quality, consumers are longing for the same crystal-clear and more vivid viewing experiences as they enjoy on their smart phone screen

That’s where consumers’ interest in the 4K picture quality and TV makers’ hopes for demand recovery are met, promising to open up huge growth opportunities for 4K UHD TVs.

The 4K UHD TV market is in the just fledgling stage, still making up a tiny fraction of global TV market, but demand is slowly shaping up in upscale, high-end premium above US$3,000 market.

Stakes are high, as it is a matter of time before the 4K TV becomes mainstay TV picture quality in the way that full HD had gone in mid-2000s, leading the renaissance of global TV market.

Not to miss out on the huge market potential, TV makers are aggressively lining up their 4K UHD products portfolio. Even low-cost Chinese TV makers want their piece of the action.

The Chinese makers’ entry suggests that the battle for market leadership won’t be fought in the same way that Korean and Japanese TV makers had butted heads in the battle for control of full HD TV market back in 2000s

The 4K TV is a sort of disruptive technology that requires discontinuity in the TV manufacturing technology and ecosystem. For example, it is now being built with a completely different TFT LCD technology called as metal oxide TFT backplane, as the technology enables panel manufacturers to fabricate smaller transistors than they built them around amorphous silicon, or a-Si TFT backplane, allowing them to cram more than 8 million pixels into a given space.

Discontinuity in technology evolution 

The 4K TV also calls for a whole new breed of image compression technology called as HEVC, or highly efficiency video codec.

The technology discontinuity is going more in favor of newcomers like Chinese TV makers, as it helps them to compete with well-established TV makers in Korea and Japan on almost an equal footing.

The wide availability and easy access to key building block technologies also have helped to lower an entry barrier to the 4K UHD market.

Once supplied only by Korean, Taiwanese and Japanese makers, TFT-LCD panels are now widely available even in China, as Chinese LCD makers like BOE and China Star Optoelectronics Technology are joining the landscape, producing them in high volume in China.

Even Korean TFT-LCD makers are putting final touches on their construction work to build their own offshore front-end LCD fabrication facilities in China to cash in on the world’s fastest   growing Chinese TV markets.

The sheer size of China’s TV market is also attracting other foreign key parts and components suppliers in Europe, the U.S., Taiwan, Japan, and Korea to flock to China to supply China’s rapid growing TV manufacturing eco-system.

This well-established manufacturing infrastructure helps explain why Chinese TV makers are rapidly catching up with front-runners in Korea and Japan in the roll-out of 4K UHD TVs.

In less than one year after Korean and Japanese TV makers showcased and started to sell an array of 4K UHD TVs in the middle of 2012, Chinese TV makers like TCL Multimedia, Hisense International Co., Ltd. and Changhong came up with a full-line-up of 4K UHD TVs for European markets.

For example, Hisense has lined up 55-inch, 65-inch, and 85-inch 4K UHD TVs for European markets, while showcasing a 110-inch UHD TV prototype. Hisense has built those 4K UHD TVs around LCD panels from such Taiwanese and Chinese LCD panel makers as BOE and AUO. .

TCL Multimedia Technology has added 65-inch and 85-inch 4K UHD TVs to its 50-inch 4K UHD line-up for the rollout in the European TV market, while showing off a 110-inch 4K UHD prototype.

Critical mass in home market  

TCL Multimedia has built those 4K UHD TV product line-up from panels from its subsidiary TFt-LCD maker China Star Optoelectronics Technology and other Taiwanese TFT-LCD panel makers.

True enough, Chinese TV makers have been rapidly rolling out 4K TVs in China to preempt their   home TV market.  But, some critics doubted that the 4K TV rollout for the Chinese TV market might match what are supposed to a real 4K TV picture quality, claiming that a tear-down analysis just showed the Chinese makers’ 4K TV were just carrying 1.9K resolution. The rapid roll-out of 4K TV in their home market reflects Chinese makers’ efforts to build economies of scale first in China and then make headways into advanced Europe and U.S. market.  

Yet, the Chinese TV makers’ 4K TV rollouts for European and U.S. TV markets turn out to carry true 4K resolution. The term of 4K refers to horizontal resolution of those 4 formats, boasting a resolution of 3840 pixels and 2160 lines, or 4K x 2K, approximately 8.3 million pixels. The 4K TV also has an aspect ratio of 16:9.  

The 4K UHD TV market is still in an embryonic stage, however, because the shift to the 4K TV technology is not just about improving picture quality, but is about revolutionizing the way of how to create bandwidth-hungry 4K contents and the transmit them.

Worldwide 4K TV shipments are forecast to grow from just 62,000 units in 2013 to 780,000 units in 2013 and then jump to 22 million units in 2017, according to U.S. consulting firm Futuresource.

The consulting firm predicts that 4K technology still has a two to three year incubation period ahead, but bets that as China and other world top-tier TV brands will be rapidly rolling out a wide variety of 4K TV models in screen size and price points, it will b a matter of time before they will reach critical mass.

Echoing the consulting firm’s rosy forecasts, U.S. market research firm NPD Display Search also predicts that shipments of 4K TVs would outgrow those of OLED TVs from now through 2015, as   top-tier TV brands are aggressively lining up their 4K TV offerings for U.S. and European premium market segments.     

Indeed, at least for a while, the premium market segment is where growth opportunities for 4K UHD TVs are laying ahead.  

No-man’s land

“When it comes to 4K UHD TV market, that might be in the 55-inch and larger category, and in terms of price point, it must be above 3000 EURO, said Masaru Tamagawa (玉川 勝), president with Sony Europe Ltd. 

“I can’t give an exact number of our 4K TV shipment target, but can give a reference. When it comes to the size of the above 55-inch TV market in Europe, we estimate approximately 2 million units in 2013. And we estimate at least 25% growth in 2014, or 2.5 million units. This is the total size of the 4K TV market opportunities. If we look at the market of above 3,000 EURO, we estimate approximately 150,000 units in 2013. Compared with 2 million units, it is still smaller. By starting with the second half of 2013 and next year, many brands will promote 4K TVs. This rapid rollout will accelerate the expansion of the above 3,000 EURO TV market from 150,000 units in 2013 to 300,000 units in 2014. Within the 300,000 units, there will be my piece of the pie,” added he.

To fight back Chinese TV makers’ big strides into the 4K UHD TV market, Korean and Japanese TV makers are also expanding their 4K TV product line-up. Global TV market leader Samsung Electronics has added 55-inch and 65-inch 4K UHD TVs –F9000 series- to its 85-inch 4K TV family, aiming to sell them in Europe as well as in the U.S. starting in September. Samsung also took the wrap off 98-inch and 110-inch 4K UHD TVs, which will go for sale sometime in 2014 in preparation for the 2014 Brazil World Cup Soccer Games.

Metal Oxide vs. a-Si TFT Backplane

Samsung’s backyard archrival LG Electronics has also lined up 55-inch, 65-inch and 84-inch 4K UHD TVs for European market.

Sony is rolling out 55-inch, 65-inch and 84-inch 4K UHD TVs, while Panasonic starts to sell its 65-inch 4K UHD TV-L65 WT600- for 7,000 EURO in the European market beginning in September.

Toshiba Corp. has lined up 58-inch, 65-inch, and 84-inch 4K UHD TVs for European market.

All of those top-tier TV makers also showcased 4K UHD OLED TVs, but it will take a long while before they will be commercially available.

As all of them are targeting above 3,000 EURO high-end, upscale market segment, almost all 4K UHD TVs are incorporating smart TV features, coming equipped with an Android OS and dual, or quad core CPU platform.

As the 4K TV market still is no-man’s land, price points are wildly varying from brands to brands, too. For example, Samsung’s 55-inch and 65-inch 4K UHD TVs are priced at 4,000 and 6,000 EURO, far lower than those of LG’s 55-inch and 65-inch comparables, which sell for 6,000 EURO and 7,000 EURO, respectively.

When it comes to above 80-inch market segment, Samsung’s 85-inch 4K UHD is priced at 35,000 EURO, almost double that of LG’s 84-inch 4K UHD TV.

Sony sells 55-inch and 65-inch 4K UHD TVs for 5,000 and 6,000 EURO, respectively. Toshiba sells 58-inch and 65-inch 4K UHD TVs for 3,000 EURO and 6,000 EURO, respectively, while selling a 84-inch 4K UHD TV for 20,000 EURO.

TCL sells 50-inch 4K UHD for about 1,000 EURO, while Hisense ships 58-inch and 65-inch 4K UHD TVs for 3,000 EURO and 6,000 EURO. Hisense’s 85-inch 4K UHD TV is priced at 15,000 EURO.

The widely varying price points are usually determined by which brands of 4K UHD TFT-LCD panels TVs are using, implying that there are still no clear market leader in the global 4K UHD TV market  at least for now. Everybody stands the equal chance to become a market leader.  For example, Samsung has built 55-inch and 65-inch 4K UHD TVs around 4K LCD panels from other panel makers in Taiwan, while using its home-grown 4K panels from its subsidiary Samsung Display to build a 85-inch 4K UHD TV. Meanwhile, LG has built 55-inch and 65-inch 4K TVs with metal-oxide TFT backplane-base LCD panels from its subsidiary LG Display.

This explains why LG’s is priced far higher.

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