Another year, another round of new TV models hitting the retail shelves. It’s that time of year again, when TV manufacturers start to bring out their shiny new toys to tempt shoppers into ditching their old screens and upgrading to shiny new ones. But TVs don’t really change much from year to year, do they? Let’s take a look at some basic TV specs to see how the industry has changed over the past couple of years.
Two years ago, the most prevalent screen size found in retail was between 40- and 49-inches. TVs sized between 50- and 59-inches came next, followed by a rapid drop-off in the number of placements as screen sizes reached into the 60-inch and above territory. Last year, the most popular screen size shifted into the 50- to 59-inch range, with a healthy presence in all sizes between 30- and 69-inches. Going into spring refresh season in 2015, the most popular screen size remains within the 50- to 59-inch size range, but the presence of 60- and even 70-inch and above models is growing. We should continue to see a trend of slight increases in size class this year when new models are placed on the shelf.
Another basic spec that has changed over the past couple of years is the type of lighting used in TVs. The old CCFL-lit LCD TVs of previous years were still present in low-end TVs in March 2013, but reduced their presence drastically by March 2014, pushed out by brighter LED-lit models. Today, there are no CCFL-lit TVs on the market. The same progression is happening with Plasma TVs, which have been reduced to a slim presence in retail and will disappear as soon as last year’s models clear the channel. OLED, the young upstart, has had a rough beginning due to its high cost and low manufacturing yield. LED will remain the dominant lighting type for many years to come.
Maybe the biggest change to hit the TV market in the past couple of years is the arrival of 4K, or Ultra HD, resolution. While the new UHD models were only a blip on the retail radar prior to the spring refresh of 2013, they now make up nearly 20% of retail placements. Ultra HD’s share of shelf will likely increase during 2015’s spring refresh season, as new models are introduced with smaller screen sizes and lower prices than previously offered. Interestingly, much of the growth of 4K seems to be coming at the expense of 1080p models, rather than 720p TVs. Much of the reason for this is that high-end 1080p models are now being replaced with 4K TVs, while the low-end, small-screen market continues to be made up primarily of 720p TVs.
Obviously, Ultra HDTVs command a premium over full 1080p HD models, but prices are changing there as well. Retail net prices continue to drop year-over-year across all resolutions, even more so mid-March as retailers try to clear out older models before the new ones arrive to the shelf. The average price for a 720p TV dropped by 16% since March 2014 but remains above $200. Full 1080p HD TVs lost 21% of their average price and went from $1,074 in 2014 to $846 today. But the most dramatic price drop is found in Ultra HDTVs, which saw a 39% year-over-year decrease in average price and fell to $3,198 this month. Prices should continue to fall with the 2015 models hitting the market as manufacturers attempt to capture share of this new sales opportunity. Increased volume, smaller screen sizes, and more competition from other manufacturers will combine to drive prices down even further.
Perhaps the most-requested feature for TV shoppers, Smart functions have grown in retail shelf share over the years. Two years ago, Smart TVs made up less than 40% of retail placements. Over the past two years, Smart TV share of shelf has increased to make up more than 60% of the retail shelf. That number is only expected to increase as the technology becomes standard and TV manufacturers are forced to compete against set-top box products such as Apple TV, Roku, and Amazon Fire. Watch for an increase in Smart functions in lower-end models, smaller-screen TVs, and manufacturers who have not previously offered the feature.
And finally, a feature that never quite hit the mark with consumers: 3D functions. Two years ago, 3D functions were found in 25% of all TVs in retail, but the feature never caught on with consumers in any significant way and manufacturers began dropping it. By this year, 20% of models on the shelf offer 3D functions, and that number is expected to shrink further during the upcoming refresh. The spec can be found on high-end models and many Ultra HDTVs, mostly as a feature used to bulk up the specs list, and not as a selling point. We can expect the number of TVs with 3D functions to dwindle and die out over the next few years.
The next few months in the TV market will be a time of big change as old models are cleared out and new models are brought in. It will also be a time of slight shifts in overall trends that take years to take shape. TVs are getting larger, but remaining bright. Resolution is getting better, but prices are falling. Models are getting smarter, yet images are remaining two-dimensional. We will find out next year if the trends will continue, or if the market will be hit with a new set of changes in the meantime.