Price cuts for LCD TVs ensure drop in value of UK consumer electronics market – but continued growth of full HD TVs help bolster figures

Demand for Full HD TVs is helping to offset the declining market value for UK consumer electronics products, according to a report from market research specialists GfK.

The total market for electrical goods fell in value for the first time for years in May, with A/V turnover down 7 per cent compared to the same period last year.

The study by GfK shows that with “vision” products contributing most of the market value, a key factor in the downturn was the performance of the LCD market.

For the first time ever in the UK, this declined in May – dropping 4 per cent despite a 12 per cent increase in LCD unit sales over that period.

Central to the decrease was a fall in the 32” segment and, coupled with an overall average price fall of 20 per cent, a sizeable decline in value was registered.

However growth remains strong in the 37", 40" and 42" LCD sectors which now represent one fifth of LCD units (Q/E May 08).

“There are signs that the overall price erosion for these larger screen sizes are slowing too: 40-42" average prices fell by 31 per cent in the latest year ending, 27 per cent in the year to date, but a less pronounced 21 per cent in the latest month,” says the report.

It goes on to point out that one of the factors contributing to this is the continued emergence of Full HD sets, which in May saw a significant increase in share of the overall LCD market, increasing from 10 per cent to 14 per cent of sales from April to May.

The report adds: “Plasma sales remain strong at 50" with Full HD also continuing to penetrate the market. A fifth of Plasma sets sold in May were Full HD.”

The second most important section of the vision market is the DVD market.

Although total DVD value has fallen on a year on year basis, the GFK report say it is “encouraging” that there are still two key growth sectors.

One is the standalone player, which it notes is boosted by High Definition.
“And with the High Definition format war now resolved we should expect to see increased activity within this area,” says the report.

“The other growth sector is DVD Recorder with Hard Disc Drive (HDD) and the HDD sector is now worth more than the no HDD sector (51 per cent of total Recorder value in May).

Although camcorders are a much less high profile market, GfK says High Definition models also offer a source of value to the market.

The report concludes that despite the downward trend seen for vision products as a whole in May there remains plenty of opportunity with High Definition/Full HD and the new service of Freesat.

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