TV replacement cycle falls below 7 years

Joseph O'Halloran ©RapidTVNews | 30-05-2012

One of the key and unique characteristics of the TV arena, especially compared with other industries such as telecoms, has been very long unit replacement cycles but research is suggesting that this figure is now falling.
A new study from NPD DisplaySearch has indicated that as households continue to replace older CRT TVs and upgrade to larger flat panel sets, and as consumers in emerging regions desire new features and latest technologies, the global TV replacement cycle has decreased from 8.4 to 6.9 years over the past year.

The study which analysed the purchase intent of consumers across 14 different markets found that the most critical driver of TV replacement in nearly all countries was a desire to trade up in size, followed by wanting to own a flat panel TV with improved picture quality. Although price was not among the top 3 reasons for recent replacements, the study indicates that it does have a significant impact on the purchasing decision.
NPD concluded that pricing can be a key driver in increasing flat panel TV penetration (by replacing CRTs) and shortening the replacement cycle (by replacing older flat panel sets).
It also found that over the next twelve months, 31% of households are planning to replace an existing TV, while 22% are planning to add a new TV.
“The rate of TV replacement varies, but on a global basis, the majority of households are still replacing CRT TVs with flat panel TVs. We are also observing mature markets, such as the US, the UK, and others, replacing their first-generation flat panel TVs,” noted Riddhi Patel, NPD DisplaySearch Research Director, Consumer Insights. “Overall, LCD TVs in the range of 32-44” are the most popular for planned purchases.”
The analyst also observed that as TV prices fall and profit margins are compressed across the supply chain, the push to introduce new premium features has taken on increased importance. Yet despite the hopes of the industry that such new features, such as 3D and internet connectivity, will drive consumers to replace TVs faster, the analyst says that the study suggests otherwise. That is to say, 3D TV and connected TV were reported to be only somewhat important in selecting a new TV, and not a strong motivator to upgrade.