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12/28/2006
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LCD-TV Market Expected To Cool, But Still Hot

Manufacturers are expected to increase supply and decrease price of large televisions.

The global market for liquid crystal display televisions is expected to remain hot next year, despite some cooling in sales, a market researcher says.

LCD-TV shipments are expected to rise by 57% next year to 62.5 million units, compared with 39.7 million units that shipped this year, iSuppli says. This year, sales rose 95% from 2005.

The slowdown is expected to be even more pronounced in terms of revenue, as manufacturers compete on price. Factory revenue would increase by 20% next year to $53.5 billion, up from $44.7 billion this year, according to iSuppli. Next year's projected increase represents a drop of 56 percentage points compared with 2006, when revenue soared 76% over 2005.

"Regardless of the slowdown, the LCD-TV market remains in a phase of explosive growth, mainly due to booming sales of large-sized sets," iSuppli analyst Riddhi Patel said in a statement.

LCD-TVs with screen sizes of 40 inches or more will be the focus of retailers and manufacturers, as the cost of the televisions declines and availability increases, the researcher says. Manufacturers are expected to ship 2.4 million units in the 40- to 41-inch range by the fourth quarter of next year, up 60.3% from the same period this year.

Shipments of LCD-TVs in the 42- to 44-inch range are expected to reach 1.1 million by the last quarter of next year, an 87.7% jump from 2006, iSuppli says. Meanwhile, average selling prices overall are expected to drop at a compound annual growth rate (CAGR) of 12.8% from this year to 2010, with the highest price cuts in the market for sets that are 35 inches or larger.

Despite the projected price drops, revenues are expected to rise during the five-year period at a CAGR of 17.2%, due to increases in the number of shipments.

By the end of next year, prices for 40- to 41-inch LCD-TVs should fall 30.8% to $1,184, while 42- to 44-inch models should drop 37% to $1,283, iSuppli said. Sharp continues to lead the market worldwide, but has fallen to No. 3 behind Philips and Samsung in North America.

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