The Latin American television market is set to make a rapid technology transition during the next four years, with LCD TV shipments to the region rising to account for more than 83 per cent of the market by 2012, up from 16.5 per cent in 2007, according to iSuppli Corp
Shipments of LCD TVs to Latin America will rise to 18.7 million units in 2012, up from 3.1 million in 2007. Conversely, CRT TV shipments will decline to 1.8 million units or 8 per cent of the market by 2012, down from 77.4 per cent in 2007.
The rise of LCD TV sales will drive the overall Latin American television market, which will expand at a faster rate than the global TV business, despite a near-term downturn. Latin American television shipments are expected to grow at a compound annual growth rate (CAGR) of 6 per cent, from 2008 to 2012. Worldwide shipments will rise by only 4 per cent during the same period.
“Most of the growth in Latin American television shipments now comes from the increased adoption of flat-panel TVs, mainly LCD TVs,” said Riddhi Patel, principal analyst, television systems, for iSuppli. “Most of the countries in Latin America have more than 90 percent TV penetration. Resource-rich countries are undergoing a replacement cycle, wherein consumers are replacing their first-generation CRT TVs—which were typically smaller than 26 inches — with 26-inch and larger LCD sets. LCD is gaining popularity as a technology in mature markets of Latin America, but the adoption is not as aggressive because of their higher price points.”
The Latin American television market underwent a phase of fast gross domestic product (GDP) growth in recent years. The improvement in the regional economy and an increase in exports spurred higher consumer spending through 2007.
However, with the recent downturn in global economies, Latin America is starting to see a slowdown. Latin America countries are resource rich, but they have taken a hit since commodity prices have plunged.
Furthermore, worries about reduced demand for energy, metals and other materials are having an impact on Latin economies. Higher inflation rates, a slowdown in consumer spending and growing economic concerns are all being reflected in the decline in the GDP growth rate for the region.
Latin American GDP growth will decline to 4.4 per cent this year and to 4.1 per cent in 2009, down from 5.4 per cent in 2007 and 6.2 per cent in 2006.
This will cause regional television shipments to decline by 4.6 per cent in 2008, and by 7.5 per cent in 2009. Shipments will return to growth with a rise of 1.9 per cent in 2010.
Shipments won't recover to the 2007 level until 2011, when they mount a vigorous recovery, rising by 12.5 per cent compared to 2011. With shipments increasing by a robust 19.3 per cent in 2012, the market will achieve a 6 per cent CAGR for the period from 2008 to 2012.
Brazil is the largest market in Latin America for LCD TVs, accounting for 34.6 per cent of regional shipments in 2008, expected to rise to 46.7 percent in 2012.
“Brazil has garnered a lot of interest from television OEMs because of the sheer size of its market and increasing interest in consumer electronics,” Patel said. “Although more than 90 percent of Brazilian households have a TV set, quite a few are black and white sets or smaller-sized CRTs. Replacement TVs are driving the growth in the Brazilian TV market. CRT will remain the most dominant technology for the next couple of years but will lose dominance to LCD TVs in 2010, as consumer uptake increases.”
CRT TV shipments to Brazil will decline at a CAGR of 36 per cent between 2008 and 2012 whereas LCD TVs will see a 49 per cent rise in CAGR for the same time period.
“Increased domestic production of LCD TVs, rising awareness, declining prices, availability of consumer credit and consumer interest in replacing older TVs with new technologies are the drivers for increased LCD TV uptake. Because of the state of the global economy and its impact on the Brazilian market, the slowdown in GDP growth and consumer spending as well as the rapid decline in CRT TV shipments will lead to a slight slowdown in the Brazilian TV market between 2008 and 2010.”
For more information, www.isuppli.com