Price war stalled, prices have become this year's color TV industry key words


For the first time in many years, China's color TV industry has been rapidly expanding its price range and the price war has quietly stopped.
The color TV industry is undergoing consumer upgrades and supply-side structural reforms. It has shifted from the previous large-scale drive to efficiency-driven, and the industry structure has been further adjusted and optimized. The strategy of “improving product quality, function, performance, and value” has become a leader in the color TV industry. select. Undoubtedly, prices have become a major trend in the color TV industry this year.
The shortage of upstream LCD panel supply is the most important upstream component of color TV prices. The LCD panel occupies about 70% of the production cost of an LCD TV. Therefore, the supply price of the LCD panel directly determines the LCD TV price.
South Korea's Samsung, LG Display and other upstream panel makers are closing the LCD panel production line. According to IHS Markit's forecast, shipments of LCD TV panels from South Korea’s upstream manufacturers such as Samsung and LG Display will shrink by 15 million units, from 106 million units in 2015 to 91 million units in 2017. This means that South Korea's LCD TV panel shipments will decrease by 14% in two years.
On the one hand, the production of LCD panel makers on the upstream side has reduced production. On the other hand, the demand for LCD panel purchases from downstream TV manufacturers is growing.
From the beginning of 2016 to the present, the bottom of the LCD panel prices began to fall short of demand, prices began to rise. As the upstream LCD panel makers are more aggressively deploying diversified product strategies, including the development of larger-size panels and other high-end products such as 4K ultra high-definition and curved surfaces, rather than focusing on expanding the current TV panel supply, LCD panels are In 2016, the overall supply was in short supply. The prices of 32-inch, 40-inch, 48-inch, 55-inch, and 65-inch models increased significantly.
In 2017, the shortage of LCD panels will continue. According to the IHS Markit study, the demand for TV panel area is expected to reach 143 million square meters in 2017, an increase of 8% from 2016. The average size of the TV panel exceeded 40 inches for the first time in 2016 and will further increase by 1.3 inches in 2017 to 42.6 inches. Given that consumers prefer a larger display model and television manufacturers promote more profitable products, the average size of TV panels should continue to increase.
In the context of the shortage of upstream LCD panels and price hikes, downstream TV manufacturers have been under severe operating pressure, and very colorful brands have started to increase prices.
LeTV, which was unsustainable for losses, became the first publicly-priced company in the color TV industry. In September 2016, some models of LeTV announced a price increase for some models, which raised the price by RMB 100-200 for some models. The “below production cost pricing” model of LeTV was starting to be challenged. On November 21st, 2016, “Lovvision’s price increase for some models of super TVs” stated that due to the continuous increase in panel prices, it insisted on the basis of hardware negative profit, and on the basis of hardware negatives, 40, 43, 50, and 55 inch models. The price of each unit is increased by 100 yuan, and the price of some models of 65 units is increased by 300 yuan per unit.
The two consecutive price increases reflect LeTV's inability to tolerate the huge losses caused by the rise of the LCD panel.
Subsequently, many color TV brands have secretly raised the price in the dark, affecting the industry's rising tide of price increases. The shortage of upstream LCD panel supply is the trigger for the price increase of color TVs.
Consumption upgrade is the driving force behind TV price hikes, which is conducive to the healthy development of the industry's consumer structure upgrade, so that color TV products have larger screens, stronger performance, more functions, and higher IQ, which require TV companies to pay higher production. The cost of research and development, which constitutes the driving force behind the price increase of the color TV industry, is actually conducive to the healthy and orderly development of the industry.
In recent years, the main theme of the color TV industry is the “price war”. There is no minimum, only lower. More and more color TV brands have joined the bottomless price war, even lower than the cost of doing television, leading to a lower and lower average selling price in China's color TV market and a vicious circle.
Some traditional color TV companies that participated in the price war, due to the backward business model, have caused their profitability to be affected, the performance of listed companies has declined, and losses have occurred, which has seriously damaged the sound development of the industry. The price-to-earnings ratio of listed companies in color TV industry is generally low, and it is not optimistic about capital. Part of the capital transferred from the color TV industry to other virtual economy is not conducive to the development of China's manufacturing industry.
Since the price war is difficult to sustain, the color TV industry will certainly return to the rational competition at the “product competitiveness” level.
In fact, the "price war" is by no means the only way out for China's color TV industry. Only "quality warfare" and "technical warfare" based on the level of product competitiveness can really benefit the industry, companies, and consumers.
At the level of "quality warfare" and "technical warfare," Xiaomi TVs, which only make high-end flagship TVs, have always been at the forefront of their peers.
For example, in January of this year, Xiaomi TV's 4 series of new products released by Xiaomi TV at CES2017 fully support HDR and wide color gamut, adopting a frameless, ultra-thin and transparent base design, completely subverting the design of traditional TVs and bringing a new picture. enjoy. Millet TV also applied Dolby's panoramic sound technology to TV products for the first time, achieving a breakthrough in TV sound quality.
In the era of smart TVs, color TV companies have made breakthroughs in operating systems and content, and they have been able to implement both hardware and software to enhance their overall competitiveness. Millet TV 4 series of new comprehensive pre-designed independent research and development of PatchWall artificial intelligence system, the system is following Apple tvOS, LG webOS, Samsung Tizen after the world's fourth largest TV system, using "MiMi brain" (Mi Brain) team frontier technology, Through magazine typesetting and infinite scrolling waterfall flow presentation, accurate content recommendation varies from person to person, which greatly shortens the user's time for finding a film.
It can be seen that no matter how the price of color TV products changes, Xiaomi TV will still highlight its cost-effective advantages in 2017, and will use technology innovation to create a market. Millet TV through the spirit of artisans, the extremely demanding product quality requirements, the ultimate control of the details, continue to make each price of products have become the same grade "best."
The rise in the cost of the upstream LCD panel is just the trigger for price hikes in the color TV industry. The technology iteration under the background of consumer upgrades can lift the price center of gravity and become the driving force for color TV prices.
With the new display technology and new technology being more mature and the technology being iteratively accelerated, the average price of color TV market has risen. In 2017, with the further deepening of supply-side reforms, the price competition model in the color TV industry will shift to the product competition model. The profit margin of color TV companies will increase, and the industry will return to rational competition.
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