The Chinese calendar claims that 2004 is the Year of the Monkey. But if the Consumer Electronics Show (CES) in Las Vegas was any indication, 2004 may instead be called the Year of the Flat-Panel TV.

The number of new manufacturers exhibiting TVs at CES in January was positively staggering. Computer companies like HP, Dell, Gateway and Epson (not to mention computer monitor firms like BenQ, ViewSonic, V Inc. and Optoma) are looking for ways to expand their brands beyond the flat growth of the computer market. Intel, though not planning to sell TVs directly, sees prosperity in making LCoS (liquid-crystal on silicon) chips for other display manufacturers, even though other LCoS chip makers have had little success up until now. Brands that are established in the Far East, such as LG (Zenith’s parent company), TCL, Regent and Humax, are similarly eager to become major players in the U.S. consumer video market. Then there are those that have no apparent connection with the video market at all—Westinghouse, Polaroid, Jensen and Memorex, to name just a few. Such companies see the climate as indicative of a good time to jump in the water.  The list of names goes on and on.

The problem is, the TV market is saturated and mature. Last we checked, the established industry brands, including Panasonic, Sony, Mitsubishi, Hitachi, Zenith, Pioneer, JVC, Toshiba, RCA and Samsung, are still around and not going anywhere. According to market research by the Consumer Electronics Association, the total number of displays sold has stayed about the same or declined slightly over the past five years.  Thankfully, total revenue is up somewhat, due in large part to sales of high-end (and expensive) flat panels. The market expects to sell a greater number of smaller flat-panel (liquid-crystal and plasma) displays this year, as consumers replace their big, bulky cathode-ray tube (CRT) TVs with thinner varieties. But there’s no indication that consumers will buy more TVs than they have bought before. The new manufacturer’s only hope for success (or survival) is if the established brands don’t retain their market share as the switch from traditional CRT to flat panel occurs.

Whatever happens will make for an interesting time in the market. Competition is often good for manufacturers. More advertising by competitors brings more awareness to the public, and increased interest can drive volume up (and prices down). But let’s face it: Everybody already has a TV. We’re just replacing sets we already own. Lower prices might entice us to replace our TVs sooner than later, but increased sales this year may only mean fewer sales next year or the year after that.

It will certainly be a tough time for manufacturers, and it won’t take long for the herd to thin out. Retailers are likely to suffer the most, though, as they will have to compete against new forms of distribution (e.g., the Internet and such nontraditional electronics retailers as grocery stores) and ever-narrowing profit margins. And you, the consumer, will face your own challenges as you navigate the sea of product options, rapid technological advances and lower prices. Luckily, Digital TV is here to help guide you through the fog.

Mike Wood
Editor

See Mike's Spring 2004 Opening Monologue: "The New TV"