'Cocooning' Wave Drives Increase Of Flat-Panel TV Shipments

There is a Santa Claus, Virginia! LCD makers are seeing a silver lining during the economic downturn as more consumers hunker down at home and ride out the recession in front of their televisions.

According to researchers at iSuppli, shipments of flat-panel TVs (LCD and plasma sets) in the U.S. and Canada totaled 7.8 million units in the first quarter of 2009, up 17.3 percent from 6.6 million during the same period in 2008.

"Amid the current economic downturn, a new wave of cocooning has hit, with recession-wary U.S. consumers eschewing travel, staying home and watching their televisions," said Joe Abelson, vice president, displays, iSuppli, in a statement. "However, they still are finding enough money to buy new flat-panel sets that offer superior pictures and larger sizes."

As consumers surf channels instead of waves, they are looking for less expensive models, low-priced retailer and value-brand TVs. iSuppli analyst Tina Tseng noted that there has been a major shift in flat-panel television purchasing price points. The fastest-growing segment in the market is flat-panel TVs that are priced in the $600 to $999 range, according to Tseng.

For many U.S. consumers, buying a lower-priced flat-panel set means purchasing a smaller set, iSuppli found, meaning that sets 32 inches and smaller went into short supply starting in April. However, larger televisions -- 40 inches and bigger -- are also coming down in price as premium brands slash prices to match those of their value competitors.

Bargain retailers are also reaping rewards from low-end flat-panel TV sales. The leading stores are Best Buy, Wal-Mart, Sears and Costco, respectively.

In the first quarter of 2009, Wal-Mart sales accounted for 22.3 percent of all U.S. flat-panel purchases, up from 13.8 percent in the first quarter of 2008, according to iSuppli. Meanwhile, purchases at Best Buy remained largely flat during the same period on a percentage market-share basis.

Wal-Mart's dramatic sales increase is directly correlated to sales of Vizio, the company's store-brand flat-panel TV. Vizio's first-quarter 2009 flat-panel television shipments in the U.S. and Canada rose to 1.4 million units, up from 829,000 in the first quarter of 2008.

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