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  • 2016 IHS Markit. All Rights Reserved. 2016 IHS Markit. All Rights Reserved.

    Arrival of New Paradigm in TV Industry 2016 November - Korea Display Conference

    Ken Park, Principal Analyst of TV Sets Research, IHS Markit Technology

  • 2016 IHS Markit. All Rights Reserved.

    Agenda

    New TV Paradigm Shift

    > Look the TV or Look through TV?

    TV Brands Strategy

    > New Comer (Go big or Go home?)

    > Hybrid (Fast Follower)

    > Traditional Brands (Power of Brand and Technology)

    Premium TV Market Forecast

    > LCD TV 4K

    > OLED TV

    > 65+ 4K HDR WCG

    2

  • 2016 IHS Markit. All Rights Reserved.

    New TV Paradigm

    Look the TV or Look through TV?

    3

  • 2016 IHS Markit. All Rights Reserved.

    2016 has another decline in revenue after big drop down 7.4% in 2015, with long stagnation until 2020

    4

    -15%

    -10%

    -5%

    0%

    5%

    10%

    15%

    $0

    $20,000

    $40,000

    $60,000

    $80,000

    $100,000

    $120,000

    $140,000

    2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

    Revenue Y/Y GrowthSource: IHS Markit Technology 2016 IHS

    Reven

    ue(m

    illi

    on

    s U

    S$)

  • 2016 IHS Markit. All Rights Reserved.

    Worldwide TV household penetrations have reached almost 80% in 2015 with Net Additions falling rapidly

    5

    71.0%

    72.0%

    73.0%

    74.0%

    75.0%

    76.0%

    77.0%

    78.0%

    79.0%

    80.0%

    81.0%

    0

    50,000

    100,000

    150,000

    200,000

    250,000

    300,000

    2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

    Replacements(000s) Net Additions(000s) Worldwide TV Household Penetration(%)

    Source: IHS Markit Technology 2016 IHS

    Do

    mesti

    c C

    on

    su

    mp

    tio

    n(0

    00s)

    TV

    Ho

    useh

    old

    P

    en

    etr

    ati

    on

    (%

    )

  • 2016 IHS Markit. All Rights Reserved.

    Premium TV defined by price point top 5% of ASP is pressured by fast price falling of 65 4K below $1000

    6

    60%

    65%

    70%

    75%

    80%

    85%

    90%

    95%

    100%

    2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

  • 2016 IHS Markit. All Rights Reserved.

    32 TV is just a commodity to give a way for promotion or a package product of 24 units at $2,856 for B2C consumers from Sams Club

    7

    Source: Costco.com 2016 IHS

  • 2016 IHS Markit. All Rights Reserved.

    In order to boost up TV demand again, new product life cycle must emerge disruptively from current product cycle by technology or by content

    8

    Innovators Early Adopters Early Majority Late Majority Laggards

    The Chasm

    New Tech

    Introduction Growth Maturity Decline

    New Biz

  • 2016 IHS Markit. All Rights Reserved.

    To break current paradigm, Innovative technology, disruptive business model, and divergent value chain should revolutionize the TV industry

    9

    CRT TV

    LCD TV

    LED TV

    3D TV

    Smart TV

    4K TV

    QD TV

    8K TV

    HD TV

    Im

    provem

    en

    t

    Beyond LCD TV

    Innovation

    Disruptive

    Revolution

    Divergence

    Improvement

    Sustaining

    Evolution

    Convergence

    LED

    MOCVD

    LGP

    PMMA

    CCFL

    R-E-E

    X

  • 2016 IHS Markit. All Rights Reserved.

    Smartphone is a good example to learn how mobile industry has grown from traditional phone market

    10

    Content Network Distribution Mobile Phone Key Technology

    2G cellular phone Voice

    3G

    - Voice Quality - Connectivity

    Telecom Carriers

    smartphone

    Wifi

    iTunes

    Data

    Apps

    LTE - Touch - Display Technology Screen size Resolution

    The Paradigm Shift tends to occur from the effort changing the key content of end-user, so innovation must arise in entire industry ecosystem by breaking the traditional boundaries

    Apple is a good example of entering the mobile industry, fetching a paradigm shift

    - Health & Fitness - Social Networking - Weather, Travel - News, Navigation - Sports, Lifestyle, - Game, Entertainment - Etc.

  • 2016 IHS Markit. All Rights Reserved.

    What about TV industry? Lets turn our views from specific TV display industry to whole TV industry

    11

    Content Network Distribution Display

    CRT LCD

    LED backlight

    3D

    Smart

    4K

    HDR

    Analog Digital

    HD

    8K

    HD

    3D

    4K

    HDR

    8K

    Free To Air

    Cable/Satellite /Telco/IP

    #1 Paradigm Shift

    #2 Paradigm Shift

    Su

    sta

    ined

    News

    Sports

    Entertainment

    Liv

    e

    On-line Streaming

    #3 Paradigm Shift

    Tim

    e S

    hifte

    d

    Drama

    Soaps

    Documentary/Life/Children

    Movies

    Comedy

    #4 Paradigm Shift

    Disruptive

  • 2016 IHS Markit. All Rights Reserved.

    Netflix, as a content creator, increases original contents as well as video subscriptions every year

    12

    Source: THR research 2016 IHS

  • 2016 IHS Markit. All Rights Reserved.

    Netflix, a content provider gradually gains a strong position controlling TV players, even involving in product development

    13

    2016 4K UHD TV(webOS 3.0)

    2016 4K SUHD TV (8/9 series)

    2016 Android 4K UHD TV

    TV instant on TV resume Latest Netflix version

    Fast app launch Fast app resume Netflix button Easy Netflix icon access

    V

    V V V V

    V

    V V V V

    V

    V V V V V V V V

    7.99$ 9.99$ per month

    Source: pictures from Netflix website 2016 IHS

  • 2016 IHS Markit. All Rights Reserved.

    Roku, a platform service provider works closely with traditional TV manufacturers in the US with more well-known brand image

    14

    Hitachi

    TCL Hisense

    Sharp

    LGE

    Insignia

    Source: pictures from Roku website 2016 IHS

  • 2016 IHS Markit. All Rights Reserved.

    Amazon, a content aggregator succeeded in several devices distributing killer contents, but failed in the fire-phone due to a strong focus on hardware

    15

    failed

    success success

    ongoing

    ongoing

    developing ongoing

    Book Video

    VR

    Music

    Game

    success

    99$ per year

    Source: pictures from Amazon website 2016 IHS

  • 2016 IHS Markit. All Rights Reserved.

    Apple is ambitious to become an operator after a content aggregator and distributor through powerful combination of its AppleTV and AppStore

    16

    Live tune-in

    HomeKit accessories

    Single Sign-on

    6,000 apps

    Source: pictures from Apple website 2016 IHS

    Apple TV Gen.4th

  • 2016 IHS Markit. All Rights Reserved.

    Merge & Acquisition is likely to occur in such paradigm shift as typical TV industry growth is stagnated and matured in traditional ways

    17

    Merge & Acquisition

    Licensing Business

    Partnership

    Done

    On going

    Rumor

    Source: IHS Markit Technology 2016 IHS

    Chinese brands licensed a brand from Japanese brands

    Global TV brands invested in panel makers

  • 2016 IHS Markit. All Rights Reserved.

    TV Brand Strategy

    New & Traditional Players

    18

  • 2016 IHS Markit. All Rights Reserved.

    LeEco announced on July 26th the acquisition of Vizio for US$2 billion

    19

    0

    1,000

    2,000

    3,000

    4,000

    5,000

    6,000

    7,000

    8,000

    9,000

    2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

    LCD PDP

    Vizio TV Shipments History