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© 2016 IHS Markit. All Rights Reserved. © 2016 IHS Markit. All Rights Reserved.
Arrival of New Paradigm in TV Industry 2016 November - Korea Display Conference
Ken Park, Principal Analyst of TV Sets Research, IHS Markit Technology
© 2016 IHS Markit. All Rights Reserved.
Agenda
• New TV Paradigm Shift
> Look the TV or Look through TV?
• TV Brands Strategy
> New Comer (Go big or Go home?)
> Hybrid (Fast Follower)
> Traditional Brands (Power of Brand and Technology)
• Premium TV Market Forecast
> LCD TV 4K
> OLED TV
> 65”+ 4K HDR WCG
2
© 2016 IHS Markit. All Rights Reserved.
New TV Paradigm
Look the TV or Look through TV?
3
© 2016 IHS Markit. All Rights Reserved.
2016 has another decline in revenue after big drop down 7.4% in 2015, with long stagnation until 2020
4
-15%
-10%
-5%
0%
5%
10%
15%
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Revenue Y/Y GrowthSource: IHS Markit Technology © 2016 IHS
Reven
ue(m
illi
on
s U
S$)
© 2016 IHS Markit. All Rights Reserved.
Worldwide TV household penetrations have reached almost 80% in 2015 with Net Additions falling rapidly
5
71.0%
72.0%
73.0%
74.0%
75.0%
76.0%
77.0%
78.0%
79.0%
80.0%
81.0%
0
50,000
100,000
150,000
200,000
250,000
300,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Replacements(000s) Net Additions(000s) Worldwide TV Household Penetration(%)
Source: IHS Markit Technology © 2016 IHS
Do
mesti
c C
on
su
mp
tio
n(0
00s)
TV
Ho
useh
old
P
en
etr
ati
on
(%
)
© 2016 IHS Markit. All Rights Reserved.
Premium TV defined by price point top 5% of ASP is pressured by fast price falling of 65” 4K below $1000
6
60%
65%
70%
75%
80%
85%
90%
95%
100%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
<$500 $500-$750 $750-$1000 $1000-$2000 $2000+
© 2016 IHS
Sh
are
of
Sh
ipo
men
ts(%
)
Source: IHS Markit Technology
~3%
~6%
© 2016 IHS Markit. All Rights Reserved.
32” TV is just a commodity to give a way for promotion or a package product of 24 units at $2,856 for B2C consumers from Sam’s Club
7
Source: Costco.com © 2016 IHS
© 2016 IHS Markit. All Rights Reserved.
In order to boost up TV demand again, new product life cycle must emerge disruptively from current product cycle by technology or by content
8
Innovators Early Adopters Early Majority Late Majority Laggards
The Chasm
New Tech
Introduction Growth Maturity Decline
New Biz
© 2016 IHS Markit. All Rights Reserved.
To break current paradigm, Innovative technology, disruptive business model, and divergent value chain should revolutionize the TV industry
9
CRT TV
LCD TV
LED TV
3D TV
Smart TV
4K TV
QD TV
8K TV
HD TV
Im
provem
en
t
Beyond LCD TV
Innovation
Disruptive
Revolution
Divergence
Improvement
Sustaining
Evolution
Convergence
LED
MOCVD
LGP
PMMA
CCFL
R-E-E
X
© 2016 IHS Markit. All Rights Reserved.
Smartphone is a good example to learn how mobile industry has grown from traditional phone market
10
Content Network Distribution Mobile Phone Key Technology
2G cellular phone Voice
3G
- Voice Quality - Connectivity
Telecom Carriers
smartphone
Wifi
iTunes
Data
Apps
LTE - Touch - Display Technology Screen size Resolution …
The Paradigm Shift tends to occur from the effort changing the key content of end-user, so innovation must arise in entire industry ecosystem by breaking the traditional boundaries
Apple is a good example of entering the mobile industry, fetching a paradigm shift
- Health & Fitness - Social Networking - Weather, Travel - News, Navigation - Sports, Lifestyle, - Game, Entertainment - Etc.
© 2016 IHS Markit. All Rights Reserved.
What about TV industry? Let’s turn our views from specific TV display industry to whole TV industry
11
Content Network Distribution Display
CRT LCD
LED backlight
3D
Smart
4K
HDR
Analog Digital
HD
8K
HD
3D
4K
HDR
8K
Free To Air
Cable/Satellite /Telco/IP
#1 Paradigm Shift
#2 Paradigm Shift
Su
sta
ined
News
Sports
Entertainment
Liv
e
On-line Streaming
#3 Paradigm Shift
Tim
e S
hifte
d
Drama
Soaps
Documentary/Life/Children
Movies
Comedy
#4 Paradigm Shift
Disruptive
© 2016 IHS Markit. All Rights Reserved.
Netflix, as a content creator, increases original contents as well as video subscriptions every year
12
Source: THR research © 2016 IHS
© 2016 IHS Markit. All Rights Reserved.
Netflix, a content provider gradually gains a strong position controlling TV players, even involving in product development
13
2016 4K UHD TV(webOS 3.0)
2016 4K SUHD TV (8/9 series)
2016 Android 4K UHD TV
TV instant on TV resume Latest Netflix version
Fast app launch Fast app resume Netflix button Easy Netflix icon access
V
V V V V
V
V V V V
V
V V V V V V V V
7.99$ 9.99$ per month
Source: pictures from Netflix website © 2016 IHS
© 2016 IHS Markit. All Rights Reserved.
Roku, a platform service provider works closely with traditional TV manufacturers in the US with more well-known brand image
14
Hitachi
TCL Hisense
Sharp
LGE
Insignia
Source: pictures from Roku website © 2016 IHS
© 2016 IHS Markit. All Rights Reserved.
Amazon, a content aggregator succeeded in several devices distributing killer contents, but failed in the fire-phone due to a strong focus on hardware
15
failed
success success
ongoing
ongoing
developing ongoing
Book Video
VR
Music
Game
success
99$ per year
Source: pictures from Amazon website © 2016 IHS
© 2016 IHS Markit. All Rights Reserved.
Apple is ambitious to become an operator after a content aggregator and distributor through powerful combination of its AppleTV and AppStore
16
Live tune-in
HomeKit™ accessories
Single Sign-on
6,000 apps
Source: pictures from Apple website © 2016 IHS
Apple TV Gen.4th
© 2016 IHS Markit. All Rights Reserved.
Merge & Acquisition is likely to occur in such paradigm shift as typical TV industry growth is stagnated and matured in traditional ways
17
Merge & Acquisition
Licensing Business
Partnership
Done
On going
Rumor
Source: IHS Markit Technology © 2016 IHS
Chinese brands licensed a brand from Japanese brands
Global TV brands invested in panel makers
© 2016 IHS Markit. All Rights Reserved.
TV Brand Strategy
New & Traditional Players
18
© 2016 IHS Markit. All Rights Reserved.
LeEco announced on July 26th the acquisition of Vizio for US$2 billion
19
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
LCD PDP
Vizio TV Shipments History
© 2016 IHS
Sh
ipm
en
ts(0
00s)
Source: IHS Markit Technology
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
LCD
LeEco TV Shipments History
© 2016 IHS
Sh
ipm
en
ts(0
00s)
Source: IHS
© 2016 IHS Markit. All Rights Reserved.
Merge & Acquisition is likely to occur in such paradigm shift as typical TV industry growth is stagnated and matured in traditional ways
20
Panel OEM Content Brand Channel
owned 100%
owned Multimedia
20% owned
2015. Dec
100%
acquired
acquired
2016. Jul partnership
© 2016 IHS Markit. All Rights Reserved.
By combining Vizio and LeTV shipments, LeEco jumped into top 7 brands at once in 2015 and will be likely to rank at top 4 in 2016
21
0
10,000
20,000
30,000
40,000
50,000
Samsung LGE Hisense TCL Sony LeEco+Vizio Skyworth
LeEco+Vizio
2015 R
esu
lt
Sh
ipm
en
ts(0
00s)
0
10,000
20,000
30,000
40,000
50,000
Samsung LGE Hisense LeEco+Vizio TCL Skyworth Sony© 2016 IHS
2016 E
sti
mati
on
Sh
ipm
en
ts(0
00s)
Source: IHS Markit Technology
© 2016 IHS Markit. All Rights Reserved. © 2016 IHS Markit. All Rights Reserved.
TCL
Fast Follower
• One of only 3 TV brands in the world and the only one in China to be vertically integrated
• World’s largest generation 11 line
• Oxide semiconductor, Cu process
• POA, Super GOA tech
• QD OLED Printing tech
• 43”, 65”, 70”(21:9), 75” LCD displays
• Ultra-large public displays as well as OLED displays
Source : TCL media day at IFA2016
© 2016 IHS Markit. All Rights Reserved.
22
© 2016 IHS Markit. All Rights Reserved.
TCL appears to step up to its own technology roadmap by taking advantage of each technology from Samsung and LG
23
LCD QD LCD OLED QLED
LCD QD LCD WOLED RGB OLED
Step 1: Skip Step2:
Skip Step 1:
LCD QD LCD QD OLED OLED
Step 1: Step 2: Step 3:
Step2:
© 2016 IHS Markit. All Rights Reserved.
New business model of “Buy hardware get content free” striving to discard the mindset of traditional TV manufacturers by strategic transformation in the internet era
24
Technology
(Quantum Dot TV)
Platform
(Roku)
Content
(Tencent)
Partnership
(LeEco)
New Business
Model
© 2016 IHS Markit. All Rights Reserved.
Mid-tier brands strike back in2017 with a license by OEM’s aggressive volume scale and cost efficiency
25
Top-tier brands
Mid-tier brands
Low-end products
1H 2016 2010 2017
15%
3%
© 2016 IHS Markit. All Rights Reserved.
Top-tier brand’s high-end product competition
26
Color
Wide Gamut
Quantum Dot
Contrast
OLED
Brightness
Backlight Master Drive
Top premium line-up comparison
Model KS9800 G6 XBR-Z9D
Brand Samsung LGE Sony
Display LCD OLED LCD
Resolution 4K 4K 4K
Peak Brightness 1000 750 2000
Color Depth 10bit 10bit 14bit
Curved Design O
Ultra Thin O O
HDR O O O
OS Tizen WebOS Android
65" $4,499 $7,999 $5,499
75" $8,999
77" $19,999
78" $8,999
88" $19,999
100" $59,999
Source: IHS Collection from each US sites © 2016 IHS
© 2016 IHS Markit. All Rights Reserved.
Premium Market
65”+ 4K HDR TV is …
27
© 2016 IHS Markit. All Rights Reserved.
LCDTV, 4K growth is expected to skyrocket, but price is falling fast as a common feature, so premium is looking for a chance with 4K HDR w/WCG over 65”+
28
5,267 7,644
9,482 11,343 12,858 14,126
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
110,000
120,000
2015 2016 2017 2018 2019 2020
4K+ WCG HDR 65"+© 2016 IHS
Sh
ipm
en
ts(0
00s)
Source: IHS Markit Technology
74% Y/Y
37% Y/Y
26% Y/Y
13% Y/Y
© 2016 IHS Markit. All Rights Reserved.
OLED TV, new players will surly help enrich OLED TV line-up as well as product enhancement in 2017
29
0
200
400
600
800
1,000
1,200
1,400
2016 2017
55" 1080p 55" 4K 65" 4K 77" 4K
OLED T V Forecast for 2016 and 2017
LGE, 95.5%
Konka, 0.7%
Skyworth, 3.6%
Other, 4.3%
LGE Changhong Panasonic Konka Skyworth
© 2016 IHS Source: IHS Markit Technology
2016 1H OLED T V Shipment share by brand(%)
106% Y/Y
© 2016 IHS Markit. All Rights Reserved.
Given 65”+ market, LCD 4K HDR WCG(incl. Quantum Dot) TV and OLED 4K HDR TV will grow to 2020 by taking shares of SDR or HDR Compatible 4K LCDTV
30
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
2015 2016 2017 2018 2019 2020
65"+ 4K HDR WCG LCDTV 65"+ 4K WCG LCDTV 65"+ 4K LCDTV 65"+ 4K HDR OLEDTV
© 2016 IHS
Sh
ipm
en
ts (000s)
Source: IHS Markit Technology
© 2016 IHS Markit. All Rights Reserved. © 2016 IHS Markit. All Rights Reserved.
Thank You
Ken Park, Principal Analyst, IHS Markit Technology