August 20, 2004 1:15 PM PDT

Report: Consumers tuning in to plasma TVs

First-quarter shipments of plasma televisions in the United States more than doubled from the previous year, according to research firm iSuppli. Prices fell by nearly $1,000 over the same period.

Manufacturers shipped about 175,000 sets. Compared with 65,000 in the same period a year ago, it represents an increase of 169 percent. Shipments dipped from the fourth quarter last year to the first quarter this year, following normal seasonal patterns. Average prices dipped to $4,542 from $5,423, and revenue in the first quarter reached $795.3 million. The fall in average prices of premium large and higher-resolution televisions was less dramatic.

Driving growth and price drops has been an oversupply of displays in the market, as well as increasing competition from new manufacturers and emerging technologies, such as liquid-crystal displays, according to iSuppli analyst Rhoda Alexander.

"You'll start to see larger LCD TVs in the near future, so the two technologies will really be going against one another," Alexander said.

LCD panel manufacturers have been building plants that can more efficiently produce larger screens, paving the way for bigger LCD TVs. The LCD panel market brought in worldwide revenue of $35.7 billion in 2003, according to research firm iSuppli. Still higher revenue is expected this year--$47 billion, an increase of 32 percent from last year.

Preliminary data shows a slowdown in shipments occurred in the second quarter, but price cuts will drive demand in the second half of the year.

The second-half estimates will be good news to manufacturers, especially those in the top five, who hope to continue to lead this fast-growing market segment.

Panasonic and Sony hold the top two spots. Panasonic shipped 27,366 units for 15.6 percent market share, while Sony shipped about 500 fewer televisions. Gateway held the No. 3 spot with 12.4 percent of the market, or 21,795 units shipped. LG Electronics was fourth with 12.1 percent and 21,244 units shipped and Hitachi was fifth with 8.5 percent of the market and 14,828 units shipped.

Gateway has claimed the top spot in the plasma market, but its shipments were down because of the closing of its stores. Shipments should be helped along by Gateway's deal with Best Buy, Alexander said. However, it also means Gateway will have to be in direct competition with bigger, more established names in the television business.

 

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