There have been some recent rumors that Toshiba America Consumer Products (TACP) is planning to uproot its corporate headquarters and relocate to southern California. I’ve heard this story enough times from CE industry insiders that I’d assume there is some truth to it, particularly when I also hear that the company is looking to hire people to work at the new HQ location.
But that’s only a sidebar to what is potentially a big (and perhaps insurmountable) problem facing the company, and that’s a slow and steady decline in market share among LCD TV brands.
According to an August 18th press release from industry analyst Riddhi Patel of iSuppli, Toshiba’s LCD TV market share in the United States has shrunken from 7.4% with 570,000 TVs shipped in the 2nd quarter of 2009 to 5.5% with 402,000 shipments in Q2 of 2010.
That’s not an insubstantial number. To put that into starker terms, Toshiba’s LCD TV shipments have dropped by almost 30% in one year, which should be sending up a huge red flag in the company’s executive offices…wherever they wind up next.
What is also alarming is that Toshiba’s market share has now fallen into Pioneer and Hitachi territory from 2007 and 2008. A few years ago, Pioneer had a 7% share among plasma TV shipments that dropped to about 5% within a two-year period (while the company was also hemorrhaging red ink). By late 2008, they had decided to throw in the towel and exited the plasma TV business in the spring of 2009.
Remember Hitachi? They once led the market in rear projection TVs and made some top-notch CRT sets, too. Hitachi was also a leader in plasma technology, building an enormous plasma fab on the island of Kyushu with partner Fujitsu in 1999.
Today, that plant is largely superfluous, as the company has withdrawn from selling plasma TVs. And you won’t find any Hitachi LCD TVs at Best Buy, or HH Gregg, or Wal-Mart, or Sears (they do have some nice Hitachi electric drills, though!).
Looking through the Amazon.com Web site, I found a handful of Hitachi sets that are either the last left in stock, or used models. (And the company was conspicuous by its absence at CES 2010.)
The iSuppli report lists the current top five LCD TV brands as Samsung, Vizio, Sony, LG, and (surprise!) Sanyo, leaving Toshiba in the #6 slot. That’s quite a fall, as they were ranked #4 in Q2 of 2009. Panasonic showed up at #8 with a 3.1% market share, but their core business in plasma TVs.
Another shocker: Sharp, once the leader in LCD TV sales, brought up the rear with a 2.4% share, a decline from 4.7% in Q2 of 2009 and a drop in Y-Y shipments of 49%. Yikes! (Is Sharp on the LCD TV endangered species list, too? That’s another story for another time…)
Given all of the LCD fab capacity in Asia and indications of LCD TV oversupply in the channel, the logical result is another round of price wars. That’s a game that Toshiba can’t compete in, because they don’t manufacture LCD panels, and would have to do some serious shopping in Taiwan and China to keep manufacturing costs down.
However, four of the five brands ahead of them do make LCD panels (Yep, Sanyo does make LCD panels, although they also buy glass on the open market), the exception being Sony. But Sony is still sitting pretty because they are major investors in both the Korean S-LCD Gen 7 joint venture fab with Samsung and Sharp’s new Gen 10 LCD fab in Kameyama, Japan. (Sony owns about 34% of the Kameyama factory and a corresponding amount of the LCD panel output.)
Toshiba was one of the first companies to introduce LED backlights in their TVs. In fact, they were one of the first companies to use the term ‘LED TV,’ thereby creating instant consumer confusion about perceived differences between LCD and LED TVs.
The past decade hasn’t been kind to Toshiba. Their prized HD-DVD technology was vanquished by Sony’s Blu-ray format (supposedly with the help of a $400 million dollar payoff to Warner Home Media), and the crown jewel – the DVD format – is showing its age and in decline.
Toshiba was one of the few companies to show working 3D TV sets with active shutter technology at CES 2010. And their Cell TV architecture (co-developed with Sony) is a powerful platform on which to build next-gen TV designs that can stream multiple channels of HDTV programs and incorporate hand gesture recognition for operation and control.
But all of that may be for naught, if this negative market share trend continues. It doesn’t help that Toshiba is perceived as a ‘mid range’ TV brand now, according to what an industry colleague heard when he recently visited several Best Buy stores in southern California and could find only two models of Toshiba LCD TVs for sale.
The marketplace is indeed a harsh mistress…
Posted by Pete Putman, August 24, 2010 1:17 PM
About Pete PutmanPeter Putman is the president of ROAM Consulting L.L.C. His company provides training, marketing communications, and product testing/development services to manufacturers, dealers, and end-users of displays, display interfaces, and related products.
Pete edits and publishes HDTVexpert.com, a Web blog focused on digital TV, HDTV, and display technologies. He is also a columnist for Pro AV magazine, the leading trade publication for commercial AV systems integrators.