DisplaySearch Reports Q3'06 Global Plasma TV Shipments Rose 45% Led By Big Screen Demand In North America - Panasonic Earns Record 33% Share

November 8, 2006

DisplaySearch, the worldwide leader in display market research and consulting, has released Q3'06 worldwide plasma TV shipments and revenues by brand, region, size and resolution for 33 different plasma TV brands as part of its Quarterly Global TV Shipment and Forecast Report. Global plasma TV shipments reached a new record high in Q3'06, rising 4% quarter-over-quarter (Q/Q) and 45% year-over-year to 2.3 million units, 1% higher than the previous high recorded in Q4'05. However, there were significant regional growth differences with plasma TVs only growing in North America sequentially, up an unusually high 38%. Shipments were down between 4% and 20% in other regions due to loss of share to increasingly competitive 37"-46" LCD TVs and inventory concerns in Europe after slower than expected sell-through from the World Cup. In fact, LCDs overtook plasma TVs for the first time in the 37" and larger category worldwide, leading in Japan, Europe and China. In addition, the LCD TV share rose from 34% to 41% in the 40"+ flat panel TV size category with LCDs already ahead in China and accounting for a 50% share in Japan. According to DisplaySearch President Ross Young, "Given share losses at smaller sizes, plasma TV manufacturers are increasing their focus on larger sizes and becoming more dependent on the North American market, like microdisplay rear projection TVs, due to the North American consumer's appetite for big screen TVs. In Q3'06, North America accounted for 70% of all plasma TVs 50" and larger. As a result, North America's share of the plasma TV market surged from 34% of worldwide plasma TV shipments in Q2'06 to 46% of Q3'06 shipments. However, 38% sequential growth into North America was likely excessive given strong competition from LCD TVs and MD RPTVs which will likely lead to channel inventory growth and increased pricing pressure. As a result, pricing will reach new record lows in Q4'06, especially on Black Friday where some brands have already announced the removal of minimum advertised pricing (MAP) restrictions. Sweet spot pricing of <$1000 for 42" plasma TVs and <$2000 for 50" plasma TVs should be realized on Black Friday from major brands and prices should remain attractive through the holiday season as price competition remains intense." Plasma TV revenues rose 18% Y/Y in Q3'06 while falling 3% to $4.7B. ASPs were down 7% Q/Q and 18% Y/Y to $2059 with the average diagonal rising 1.2" Y/Y to 44.1". The average size in North America was 2"-4" larger than other regions at 45.4". By size category worldwide, the 42" HD category rose from 43" in Q2'06 to 50% in Q3'06 followed by 42" ED which fell from 30% to 21% and 50" which rose from 17% to 19% and will surely overtake 42" ED in Q4'06. With 42" ED declining, the HD share rose from 70% to 79%. By brand, Panasonic remained #1 for at least the 9th consecutive quarter reaching a record high unit share of 33% and revenue share of 34% on 20% growth as shown in Table 1. It remained #1 in every region except ROW where LGE remained #1. Panasonic led in most size categories including 37" HD, 42" HD, 50" HD, 55"-59" HD, 55"-59" 1080p and 60"+ 1080p. LGE led at 42" ED while Pioneer was #1 at 50" 1080p and 60"-65" HD. LGE remained #2 with a slight edge over Samsung, but Samsung claimed the #2 position on a revenue basis.

Table 1                        
 
Q2’06 – Q3’06 Plasma TV Unit Share and Growth 
 
  Rank    Brand  Q2'06  Share  Q3'06  Share  Q3'06 Q/Q  Unit Growth 
  1  Panasonic  28.3%  32.8%  20% 
  2  LGE  17.1%  15.3%  -7% 
  3  Samsung  13.6%  15.2%  15% 
  4  Philips/Magnavox  10.3%  9.6%  -3% 
  5  Hitachi  7.4%  6.9%  -4% 
    Others  23.2%    20.2%    -10%   
    Total  100.0%  100.0%  4% 

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