The Hindu Business Line : `Flat-screen TV segment all set for rapid growth'

WITH an average price decline of about 8 per cent to 10 per cent every year in the sector, the domestic colour television market is fast moving up the value chain in terms of technology and design. According to industry watchers, while the share of the entry level 14-inch CTV is expected to fall in the current year, the flat television segment is set to make rapid inroads. "We expect flat televisions to account for more than 20 per cent of sales of the market in 2004. Conventional televisions are getting outdated," points out an official from the Consumer Electronics and Television Manufacturers Association (CETMA).

Blame it on cutthroat competition in the CTV category, which is driving prices downwards, as well as the near negligible margins for multinationals at the bottom of the value chain. "Even in the 21-inches segment, which is likely to be the largest segment by end-2004, flats are likely to contribute to about 60 per cent to 70 per cent of sales this year. In fact, almost all the developmental work that is happening in the industry is in the 21-inches flat category," says Mr Chandramani Singh, National Head, Consumer Electronics, LG Electronics India.

According to industry estimates, the share of the 14-inch segment is expected to fall from 20 per cent to 21 per cent to about 17 per cent to 18 per cent by the end of the calendar year. The share of the 20-inch segment too is expected to fall marginally from 39 per cent to 40 per cent to about 37 per cent. Meanwhile, as the price differential between the 20-inch and 21-inch television narrows down, the 21-inch segment is expected to better its share from about 36 per cent to 40 per cent this year. The share of high-end CTVs is also expected to grow from 2 per cent to about 4 per cent to 5 per cent this year.

Incidentally, the entry-level 14-inch CTV segment has become a mainstay for the smaller regional players, who have driven prices below the Rs 5,000-mark for the segment. However, with CTV penetration still at very low levels in the country and a narrowing price gap between the 14-inch and 20-inch segments, multinationals are keen to develop the 20-inch segment as an entry level one.

Samsung India, for instance, which had phased out its economy Annapurna range of CTVs last year, has plans to exit from the 14-inch economy segment. "We are exiting the economy in the 14-inch screen size segment and strengthening the 20-inch/21-inch screen size segment .We are focussing on upgrading the market from 14-inch to 20-inch/21-inch screen size segment," says a Samsung official.

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