TV brands have been adjusting their 2011 LCD TV business plans downward at a rapid pace, in acknowledgement of the fact that end-market demand is not what they had expected. However, TV brands and OEM/ODM makers are still planning to increase their Q3â€™11 production plans in order to meet demand for the upcoming holiday season. According the latest DisplaySearch MarketWise-LCD Industry Dynamics, the combined production plans for the top sixteen LCD TV brands will increase from 14.4 million in July to 16.9 million in August, and then 19.4 million in September. At the same time, LCD TV subcontract manufacturers (OEM/ODM) are planning to increase their production from 3.9 million in July to 4.7 million in August, and then 5.4 million units in September.
A couple of things to consider. Manufacture plans are more like goals. They want to reach a certain target, which could be units, revenues, profits, market share, etc. And behind these goals are people, who need to meet those goals for promotions, bonuses, a better job elsewhere, etc. Goals, as an aggregate, are necessarily more than what will eventually happen. That’s one.
Two, when you see something like, “LCD TV brands will increase from 14.4 million in July to 16.9 million in August, and then 19.4 million in September,” you have to be careful. What is incorrectly assumed in a statement like this is that the mixture of different sizes remain the same. Most likely it is not.
The economy the world over is struggling, except for the really rich, who sometimes benefit when economies struggle. Each day the middle class shrinks: the majority gets poorer, while a tiny portion gets richer. LCD TV brands know this, so the increase in production will have a slightly different mixture than before. My guess: there will be a lot more really cheap models, a bit more luxury models, and significantly less middle-of-the-road models.
So are LCD TV brands really increasing production? Should we think the economy is getting better? Should we expect great sales performance later this year? No, no, and no.