Although capacity saturation and declining performance are the norm in the color TV market in recent years, the situation in 2017 is particularly severe. Affected by the continuous rise of LCD panels (panel costs accounted for more than 65% of total machine costs), China's color TV retail sales decreased by 6.6% year-on-year in 2017 , the largest drop since 2003.
It is reported that the current price of TV panels has fallen to or near the historical low point of the previous wave of price cut cycles in 2016. Ovid Cloud expects prices to continue to drop in June of this year. Everything seems to indicate that the entire manufacturers have ushered in. The turning point in operating pressure, is this really the case?
LCD panel prices diving again
According to IHS analysis, panel oversupply is the main reason for the decrease in TV panel prices.
In fact, TV panel prices have declined for three consecutive quarters since the end of the second quarter of 2017, but some panel makers have not reduced their production capacity. In addition, panel makers’ investment enthusiasm for high-generation production lines is still rising, with mainland panel giant BOE. Two 10.5-generation large-size LCD production lines have been built in Hefei and Wuhan, and the production capacity has been accelerated. In the short-term, the demand for TV sets in China, including the whole world, has not been effectively improved. Therefore, in April this year, the entire factory's 'World Cup' stocking process is drawing to a close. After that, the situation of panel oversupply became more severe, which accelerated the decline of panel prices.
This round of price cuts covered all major size panels. According to forecast data published by Orville Cloud on May 9, in May this year, 32-inch, 40-inch, 49-50-inch panel prices will fall by 2 US dollars, 43-inch panel prices. It will drop 4 US dollars, 55-inch panel prices will continue to decline, even the ultra-large 65-inch panel is no exception.
Machine manufacturers usher in business pressure to turn?
If panel prices remain declining throughout the year, it is indeed a landmark turning point for large-scale TV makers to reverse profitability.
Insiders of the entire machine manufacturer stated that taking a 50-inch 4K class panel as an example, if the monthly decline rate is 4 US dollars, it will give the whole machine manufacturer a relief for the profit pressure of 25 million yuan per million units.
Previously due to panel prices, domestic TV manufacturers increased the price of some TVs. Today's panel prices have declined across the board to provide TV makers with enough room for price cuts. Low-price competition between TV makers has not only stayed between 32 inches and 50 inches. , Also extended to the mainstream size segment, large size segment. As the e-commerce channel is very sensitive to the price, online market, some manufacturers took the lead to reduce the price of 55-inch LCD TVs to 1999 yuan. Meanwhile, affected by the sharp decline in panel prices, some 65-inch LCD TV prices also dropped to 3,499 yuan.
Of course, not all TV manufacturers dare to lower prices. Most manufacturers are still watching. For example, in the May 1st sales season (April 30 to May 5), most brands follow in order to test market conditions. Some 55-inch TVs will be reduced to more than 2000 yuan. Because there are still two relatively large sales opportunities - '6.18' and the World Cup, the manufacturers hope to drive TV sales through these two nodes. Gome TV Division General Manager Zhang Tao believes that TV manufacturers have the pressure of shipping scales. In order to promote sales, many manufacturers have already lowered the price of 55-inch TVs to 2,399 yuan, and it is not far from 1999 yuan.
Panels have excess capacity and prices drop. In the short term, it is a good thing for the downstream color TV companies to reduce the purchase cost of TV companies. However, in the long run, it is not necessarily a good thing. No support, no end, no bottom line price The war will eventually destroy the value of the industry and lose the future of the industry.
The 'recovery' of LCD panel prices is not the beginning of spring for Chinese color TV companies, but the beginning of even greater challenges.