Based on the survey by WitsView, a research division of TrendForce, in 2Q10 panel procurement among China leading TV brands, 32W accounted for the largest ratio with 41%, which was similar to global TV panel procurement with 42% in same size.

 

On the other hand, 26W and below TV panel procurement ratio of China TV brands reached 30%, which outstripped worldwide average of 22%. That is, the procurement share merely on 32W and below was up to 70% of total procurement volume. WitsView indicated that due to China’s huge poverty gap, small-sized products, whose price was lower, remained the primary choice to buyers with limited budget. Additionally, with China’s vast territory, there were great amount of population leaving hometowns for jobs and education, which means this group of consumers preferred small-sized TVs which enabled more mobility . Accordingly, it was predictable that 32W and below TV accounted for the largest ratio in China’s market.

 

As for 40W and above TV panels, the procurement volume of China’s TV brands was lower than the worldwide average of 31%, merely accounting for 24%. WitsView pointed out that as a matter of fact, 40W and above TV demand remained at a certain level in China’s end market. In terms of the residential condition for market development, the living space in China was bigger than that in Europe and Japan. However, budget was no longer the sole consideration among large-sized TV buyers. Thus, consumers aiming at large-sized TV may turn to international brands. As a result, sales performance and procurement volume of 40W and above TV from domestic brands may become weaker.

 

In China’s monthly TV panel procurement, since 4Q09, the highest average size of 34.4W was recorded in last December, while the lowest of 30.8W was in March 2010. WitsView found out that the average size trend in China panel procurement appeared to have strong negative correlation with panel price. The aforementioned timing happened to be the two major turning points for panel prices. In other words, when panel price was up, average size in panel procurement would go down; and vice versa.

 

As digging deeper into the background, WitsView indicated that the relatively low TV pricing was the primary advantage among China brands while competing with international brands, so its cost-sensitiveness was extremely high. Hence, when the rising panel price caused the increasing TV set cost, brand vendors rather went for the lower-priced small-sized TV segment. This was also the main cause leading to the drop in average size.