Recession-wary U.S. consumers have entered a new wave of “cocooning,” preferring to stay at home and watch their televisions — large, flat-panel HDTVs — rather than traveling and seeking entertainment outside.
That’s the conclusion of Joe Abelson, VP of displays for research firm iSuppli, who noted the unexpected expansion of flat-panel TV sales in the first quarter of the year, despite a gloomy outlook for the economy.
Plasma and LCD TV shipments in the United States and Canada reached 7.8 million units for the quarter, up 17.3 percent from 6.6 million during the same period in 2008. One way consumers have continued to propel their purchases of HDTVs is moving toward less-expensive models, value brands and low-price retailers, he added.
“There has been a major shift in flat-panel television purchasing price points,” said iSuppli analyst Tina Tseng. For example, during the first quarter, nearly 70 percent of U.S. TV purchases were for sets costing less than $1000, up from about 63 percent in Q2 2008, according to a recent iSuppli consumer survey.
Flat-panel television sales of sets costing $600-$999 rose the fastest, growing 3.6 percent in the first quarter compared to the second quarter of 2008, according to the research firm. Purchases of flat-panel sets priced lower than or equal to $599 increased by 2.6 percent.
Sales of more expensive sets suffered in the United States. Those priced from $1000-$1499 declined 1.7 percent; those costing $1500 to $1999 fell 1.3 percent; and those priced at more than $2000 fell 3.1 percent, iSuppli statistics showed.
According to the researcher, the shift in preference to smaller, lower-cost flat-panel sets resulted in dwindling supplies of sets 32in and smaller in April. Additionally makers of premium-brand 40in flat-panel HDTVs have slashed prices to match the prices of value brands.
The quest for lower prices also influenced where consumers bought their sets in the first quarter, propelling No. 2 flat-panel television retailer Wal-Mart in the first quarter of 2009 to 22.3 percent market share, up from 13.8 percent in the first quarter of 2008.
The spike narrowed the gap separating Wal-Mart from top flat-panel retailer Best Buy to one-tenth of a percentage point. Sales at Best Buy remained flat for the quarter, iSuppli reported.