As the global TV market continues to struggle with unit volume growth overall in 2017 — now projected to decline for the second year in a row — attention has turned to the most profitable market segments. This includes larger screen sizes and advanced technologies like OLED, quantum dots, 4K and HDR, each of which helps boost average selling prices and profits. In fact, OLED TV revenues are forecast to grow 71 percent year-over-year in 2017, while 4K TV revenues will increase 31 percent year-over-year, according to IHS Markit (Nasdaq: INFO). A number of brands have adopted OLED technology into their TV lineups in 2017, including Sony, joining LG Electronics, the primary promoter of OLED.
In 2016, the share of TV shipments at $1,000 and higher price points amounted to 5 percent of units, but more than 20 percent of dollars. Largely this is driven by the rapid share growth of 4K, especially at the largest screen sizes, where the retail premium for 4K has held remarkably steady without impacting average size growth.
Within the $1,000 and higher market segment, OLED TV share has grown significantly during the past eight quarters, from 2.4 percent in first quarter 2015 to 13.8 percent in first quarter 2017. Looking forward, IHS Markit is forecasting OLED TV shipments to grow from 723k units in 2016, to 6.6 million units in 2021. However, due to the very high average selling price of OLED, the unit share of the $1,000-plus market will increase to a peak of 59 percent in 2019, before declining as 8K LCD TVs begin shipping with very high prices as well.
The average selling price of a 4K OLED TV in 2017, forecast at $2,247, is nearly 6 times greater than the average LCD TV, and three times greater when looking at just the 50-inch-plus and larger size category. However, the introduction of quantum dot enabled LCD TVs more directly competes with OLED TVs at the highest price points. Quantum dot LCD TVs are expected to account for 4 percent of LCD TV shipments in 2017, rising to 15 percent by 2021, and exceeding OLED TV shipments in the process. Samsung is the dominant brand in the quantum dot LCD TV category, accounting for 90 percent of shipments in first quarter 2017.
By 2020, 8K LCD TVs will have launched in all regions, primarily at 65-inch and 75-inch screen sizes. At the early introduction stages, 65-inch 8K LCD TVs will carry a 35 percent premium against 65-inch 4K OLED TVs, but gradually reduce as capacity rapidly increases in LCD fabs optimized for 65-inch-plus screen sizes.
