11/11 and Beyond
We have mentioned the recent poor results of the Chinese National Day festival and how much of that weak sales performance was based on a reduction in subsidy funding from both the Chinese State and provincial governments. While pinning down the exact cause is an impossibility, we do note that the Chinese spirit is not easily broken (at least publicly), and the Chinese CE space is filled with what it believes to be pointers to another cycle of TV set growth. This is visibly evident in the TV space where even a 10.4% y/y decline in TV set shipments in 3Q (down 6.6% q/q) and comments in the trade press like “the third quarter of this year was the only third quarter in at least the past five years to experience a month-on-month decline in the Chinese TV market,” still lead to how TCL (000100.CH) and HiSense (600060.CH) are leading the world in the RGB Mini-LED market and eventually question as to whether 11/11 and the domestic TV market for the full year are ‘really that important’. Only a few months back they were considered vitally important.
What it really comes down to is that while government support to stimulate consumer spending for CE is an effective short-term tool for boosting performance, as soon as the faucet gets turned off, the industry is back where it started, with little or no progress as to finding a solution for the basic problem, that of a lack of TV innovation. Television grew up as a communal viewing platform where people could congregate and watch a program at a particular time on a particular night. VCRs, streaming, and smartphones ended that practice years ago, but the TV industry has never moved on, still trying to stem the tide that pulls viewers to more convenient platforms. TV size growth stemmed the tide for a while as almost life-size screens become more normal, but there is still something missing.
Just like the Chinese optimistic view of a poor situation, the Tv space is hoping for a savior. A few years back it was OLED, and for a short moment it was Micro-LED, and now it’s AI, but little has really changed and there is little on the horizon to propel the TV space forward. Technology is not a problem, as new display technologies are under development and quality continues to improve, but that does not solve the problem of how to get some of the inherent excitement that comes from a group of people watching something on a screen. Yes, today hundreds or thousands can be watching the same movie or video on monitors, phones, tablets or other displays, but they are not in the same room and there is little of the shared excitement that came from watching the Beatles on Ed Sullivan for the first time, Nixon’s farewell address, or the dismantling of the Berlin Wall. That shared excitement is missing as part of the TV experience, and without that even large TVs are just Time Square advertising.
We are just as confused as how to solve this TV set dilemma as executives, engineers, and designers in the TV set space, but a solution is necessary if TV sets will ever again become a growth engine for CE. There will always be ups and downs, but we expect there is little on the technology horizon that will change what we expect is a no-growth scenario. How do you get people to sit down with each other and enjoy something communally? That’s a difficult question in a world that is increasingly private and isolated; a world where conflict is increasing faceless and discussions typically end in name calling. We don’t have an answer, but we believe whatever it turns out to be it will require that no smartphones be present.
What it really comes down to is that while government support to stimulate consumer spending for CE is an effective short-term tool for boosting performance, as soon as the faucet gets turned off, the industry is back where it started, with little or no progress as to finding a solution for the basic problem, that of a lack of TV innovation. Television grew up as a communal viewing platform where people could congregate and watch a program at a particular time on a particular night. VCRs, streaming, and smartphones ended that practice years ago, but the TV industry has never moved on, still trying to stem the tide that pulls viewers to more convenient platforms. TV size growth stemmed the tide for a while as almost life-size screens become more normal, but there is still something missing.
Just like the Chinese optimistic view of a poor situation, the Tv space is hoping for a savior. A few years back it was OLED, and for a short moment it was Micro-LED, and now it’s AI, but little has really changed and there is little on the horizon to propel the TV space forward. Technology is not a problem, as new display technologies are under development and quality continues to improve, but that does not solve the problem of how to get some of the inherent excitement that comes from a group of people watching something on a screen. Yes, today hundreds or thousands can be watching the same movie or video on monitors, phones, tablets or other displays, but they are not in the same room and there is little of the shared excitement that came from watching the Beatles on Ed Sullivan for the first time, Nixon’s farewell address, or the dismantling of the Berlin Wall. That shared excitement is missing as part of the TV experience, and without that even large TVs are just Time Square advertising.
We are just as confused as how to solve this TV set dilemma as executives, engineers, and designers in the TV set space, but a solution is necessary if TV sets will ever again become a growth engine for CE. There will always be ups and downs, but we expect there is little on the technology horizon that will change what we expect is a no-growth scenario. How do you get people to sit down with each other and enjoy something communally? That’s a difficult question in a world that is increasingly private and isolated; a world where conflict is increasing faceless and discussions typically end in name calling. We don’t have an answer, but we believe whatever it turns out to be it will require that no smartphones be present.
RSS Feed