HDTV Update for North America

Implications: 1.  Sharp recently regained the number one spot for sales of HD LCD TV’s from Vizio.  2. 60% households who are planning to purchase a new television in the next six months are planning to buy an HDTV set.      3.  DIRECTV is achieving strong HD growth.

Analysis:  Sharp recently regained the number one spot for sales of HD LCD TV’s from Vizio.  The North American TV brand sell-in rankings were shaken up in Q3 2007 with Sharp on top in LCD TVs for the first time since Q1 2005. Sharp led the North American LCD TV market with an 11.3% share, rising from #3 in Q2 2007. Vizio fell to #2 despite 334% YTY growth. Vizio had the slowest QTQ growth of the top five LCD TV manufactures. Vizio’s slower Q3 2007 sequential growth can be explained by the less seasonal nature of its primary sales channel: the warehouse club channel.  

Almost all households in the U.S. have at least one television in their home (99%) with 47% having three or more television sets. HDTV penetration currently stands at 23% with 22% of these HDTV households having two or more HDTV sets. World Wide flat panel TV spending will exceed $100 billion this year with US HDTV sales to top $65 billion by 2009.  According to CTAM (Cable and Telecommunications Association of Marketing), 60% households who are planning to purchase a new television in the next six months are planning to buy an HDTV set. Of those households, 47% are planning to purchase a LCD set, with 33% planning to purchase a plasma HDTV set.  

DIRECTV achieved strong HD performance in Q3 as well, with net subscriber additions increasing by 45 percent to 240,000, driven by gross additions of 1.032 million.  Over 50 percent of the gross 1.032 million additions in the quarter signed up for HD and/or DVR services compared to only 28 percent a year ago.