Market review of television sets in Ukraine

Kiev 2009

MARKET REVIEW OF TELEVISION SETS
Research plan 1. General Market Description....3 1.1. Description of the Ukrainian Market....3 1.2. Classification of Home Television Sets (share in the market, %)..3 Source: Contracts.....3 - CRT.....3 - Plasma.....4 - LCD.....5 - LED/OLED.....6 1.3. Basic Parameters of the Market of Home Television Sets, Calculation of the Market Capacity.6 2. Production and Sale.....7 2.1. Production and Sales of Home Television Sets (All Types), in numbers..7 2.2. Production and Sales of Home Television Sets (All Types), in money terms..9 3. Foreign Trade.....10 3.1. Export (Structure, Geography)....10 3.2. Import (Structure, Geography)....11 4. Basic Market Operators (TOP 15)....17 4.1. List and Description of the Basic Market Operators...17 4.2. Structuring of the main operators....19 4.3. Market shares of the main operators....20 5. Price and pricing on the market....21 5.1. Price situation on the TV market (analysis of the price structure)..21 5.2. Comparative analysis of prices....21 5.3. Dynamics of average prices of TVs for the period 2005-2009...23 6. Range of products on the market (brands, volumes)..24 7. Consumption of goods....26 8. Distribution channels....28 9. Summary. Forecast for the market capacity until 2011...30
www.pro-consulting.com.ua
1. General Market Description 1.1. Description of the Ukrainian Market Popularity of HD television sets (HDTV) is a result of powerful promotional campaign organized by manufacturers of household appliances. Literally for several years, vendors have made consumers believe that a modern TV set and a HDTV are inseparable notions. Practically all recent models of flat panel displays can receive HD signal (HDTV-ready). They cost 25 percent more than TV sets with PAL/SECAM or NTSC only. Current tendencies of the market have had an impact on the post Soviet countries, and on Ukraine in particular. For instance, 320,000 LCD TV sets at the cost of 256 million USD were sold in Ukraine in 2007, and in 2006 the segment capacity had hardly reached 100 million USD. About 75 percent of LCDs that are sold in Ukraine support HD technology. First HD-compatible receivers received signal with a definition that is larger than the standard one (broadcast), but the image was no better. Consumers could use HD video players or HD video receivers, but they still failed to have the promised high definition picture. HDTVs-ready have followed them. Nevertheless, they also do not ensure full value HD picture. Number of pixels in the HD-ready picture with the definition pixels reaches one million. It is about half as large as Full HD full value television with high definition with a picture pixels. Models available in the market support HDTV and are equipped with Automatic Picture Control system that is a small sensor equipped with camera which can register illumination (lighting) parameters in the room and automatically regulate screen brightness (saturation). The major part of the market of modern TV sets is occupied by LCD models (without taking into consideration CRTs which are gradually pushed to the sidelines). It is conditioned by several reasons: LCDs are more power saving; picture is better from the point of view of quality than in CRTs; production technologies are simpler and cheaper than those for plasma and OLED prototypes. 1.2. Classification of Home Television Sets (share in the market, %) Depending on the technology applied, current TV sets may be divided into four types: ordinary with cathode-ray tube (CRT), projection (CRT, LCD or projector may be used as a source of picture), plasma and LCD. Diagram 1.2.1 Shares of TV Sets in the Ukrainian Market, % Type of a television set Plazma LCD CRT Projection and portable 2006 1,5 5,0,2,7 15,1 82,1 0,3,8 28,9 67,1 0,4,4 39,2 56,1 0,3

definition for 42 is 852 x 480 pixels (for nonexpensive models) and 1024 x 768 pixels for more upgraded. The imaging method is an important factor as well. There are two basic imaging methods: interlace and progressive. Unlike the first method interlace scan that is used in traditional kinescope TV sets, progressive scan ensures such a generation of the video image displayed on the TV screen or panel when every image line is transmitted one by one. In fact, equipment with progressive scan can display twice as many lines in a frame (shot). Consequently, image becomes clearer, effects of flickering of thin horizontal lines, comb effect in case of movement of objects and flickering effect in case of display of static images disappear. For instance, special antistatic covering is available it is a special covering of plasma panel display that protects the display itself from electrostatic charge which gathers dust and therefore has a negative impact on human health. Antiglare covering may also be available which decreases reflection of external light from the glass surface of plasma display. Connectors and ports are also very important factor list of devices, appliances and units that may be connected to a TV set depends on this factor. It is necessary first of all to pay attention to possibility of connecting acoustics, available connectors for computer, etc. Thus for instance, SCART connector with active RGB outputs and quick switch signal or SVideo connector with separate brightness and color signals, or Y/C output to SCART, as well optical output of sound channels ensure the best quality of video and audio signals. - LCD LCDs are very popular in the market and are represented by a large number of models. Even the simplest LCDs are free from main drawbacks of CRTs: flickering, large size and weight, problems with beam convergence, geometrical distortions and harmful electromagnetic emission. Brightness is one of the most important parameters of LCD. It depends on brightness how comfortable it is to watch TV in the illuminated room sunny day, bright external light, etc. e.g. in mostly frequent cases. Minimum value for brightness is currently 350400 candelas per quarter meter, and it allows watching TV in the illuminated room with more or less acceptable quality. Although, when direct sun rays come in contact with a screen, it is not comfortable to watch TV. LCD price depends upon its brightness insufficiently, since the latter varies for models with the same size in small range: for example, among 15 models, it is within the limits 400 to 500 candelas per quarter meter, for 26 and 32 it is 450-600 candelas per quarter meter, etc. Angle is the second key feature of any LCD. The larger angle is, the more comfortable it will be to watch TV from any place in the room. Modern models have an angle equaling to degrees vertically and horizontally, e.g. in fact the problem concerning the place from which to watch TV is removed. It is possible to place or hang LCD in any place. However, such appliances cost much more than their less modern prototypes. For instance, 15 TV set with angle of 170 degrees vertically and horizontally will cost much more than a TV set with the same size and all other parameters (even with better brightness) but with angles of 160 and 130 degrees vertically and horizontally. This difference will be even more significant for larger sizes. It is important to have information about connectors on such a TV set. As a rule, manufacturers equip LCD with standard TV/Video connectors such as RGB, SCART, Component, S-Video. Number of non-operating pixels is a next parameter. These are pixels that are permanently active in any certain state and do not change their color based on the signal. Different manufacturers allow different number of non-operating pixels on a screen, what they specify in their user manuals. As a rule, nonoperating pixels are not acceptable for LCDs. Except for the parameters listed, matrix response time is provided in specifications for every LCD. Any LCD is a translucent type screen that is flashed on from rear side by a white lamp, and the cells of main colors (RGB red, green, blue) located on three panels of relevant colors let or do not allow light to pass through them depending on power applied. That is why certain picture delay occurs; it is especially seen in case of quick movement of objects. The level of such a delay characterizes response time the lower value it has, the better it is. Modern models have this parameter varying in the range from 8 ms (1000 ms = 1 s) to 16 ms, and it depends on matrix type and size. Additionally, different manufacturers measure this parameter in a different way (normally, for their benefit). Definition is the second and not less important feature. As a matter of fact, the best

picture is displayed when matrix physical definition is equal to the definition of the input signal. Due to this, to watch DVD (it is hard to find better quality signal) pixel definition is ideal but TV sets with such a matrix are yet not available in the market. To watch TV with 4:3 format and small size (up to 26), pixel definition is quite enough. Larger displays (over 32") have options for HDTV which is soon going to become the standard of video picture in the whole world. pixel definition is a definition that is good for such a signal, although such TV sets cost a lot. Lamp life is one more important peculiar feature of alike TV sets. In most modern LCDs it is equal to 60,000 hours subject to maximum brightness (it is enough for about 16 years subject to 10 hour run every day). However, TV sets with less lamp life are available in the market. For comparison: in plasma TV sets brightness reduces quicker for the same time, and for kinescope TV sets (in this case, phosphor burns out) the threshold is 15,000 20,000 hours, after that quality becomes much poorer. - LED/OLED Organic LightEmitting Diode (OLED) is an organic light emitting diode device manufactured from organic compounds which effectively emit light by passing electrical current through them. OLED technology is basically applied for manufacture of displays. It is expected that production of such displays will be less cost-consuming than LCD production. Thinfilm multilayer structures (several layers of polymers) are used for OLED production. Brightness. OLED displays ensure brightness from several candelas per quarter meter (night time) to very high brightness levels over candelas per quarter meter, and brightness may be regulated in a very wide dynamic range. Since display lifetime is inversely proportional to its brightness, it is suggested to use moderate brightness levels up to 1000 candelas per quarter meter. When lighting LCD display with bright light beam, glares appear, and picture on OLED display become bright and saturate with any level of lighting (illumination) (even in case of direct contact of sun rays with a display). Contrast. OLED is a leader here as well. OLED displays have contrast 1000000:1 (LCD 1300:1, CRT 2000:1) Angles. OLED technology allows watching display from any place and under any angle without any impact on picture quality. Power consumption. OLEDs consume half as much power as LCDs. Need for advantages demonstrated by organic displays is growing every year. This fact allows making a conclusion that boom of such a technology is going to take place soon. LED TV (Light Emitting Diode TeleVision). The term (or concept) was introduced by Samsung for promotion of own line of LCDs with EdgeLED. Usual LCDs use fluorescent lamps (CCFL Cold Cathode Fluorescent Lamp). It is worth noticing that Samsung is not the sole and not the first manufacturer of such TV sets. Sony, Philips and Sharp also manufacture LCDs with LED lighting. As a concept, LED TV evokes many disputes with regard to the issue of lawful use thereof, since technically such TV sets are not 100% LED type TV sets. Modern LEDs are larger than pixels of a modern TV set. Therefore, real use of full value LED matrix is possible in very large displays only, on stadiums for example. From the consumer point of view, LCDs with LED lighting have three enhancements when compared to LCDs with CCFM lighting: 1. Enhanced contrast (unavailable for EdgeLED); 2. Extremely thin (only for Edge-LED); 3. Improved color display (especially RGBLED).

1.3. Basic Parameters of the Market of Home Television Sets, Calculation of the Market Capacity Within the recent years, Ukrainian TV set market has experienced explosion in development and growth. The largest market capacity was reached in 2008 (2,821,300 TV sets sold). However, since crisis has become to be felt, growth rates have slowed down significantly. Several reasons are available - the main ones are the following: Unstable situation in the currency market (since the Ukrainian TV set market basically develops and depends on import of products by major world manufacturers, it may be confidently stated that it also depends on currency fluctuations. In other words, when the foreign currency exchange rate becomes higher with respect to national currency, consumers have less opportunity to buy such goods);
Loss of buying capacity (it is explained by the fact that when crisis has become to be felt, many Ukrainians either have lost constant source of income or it has been reduced significantly. Based upon this, consumers are now attracted by essential goods, and purchases of appliances (for example, TV sets) are postponed to more stable financial situation); Reduction of consumer credits (consumer credits are considered to be one of the powerful activators of market growth and development); governmental 13 percent markup for goods of non-critical import (the duty was introduced in March 6, 2009 effective for a half a year with the purpose of stabilization of state trade balance. However, this law has had a negative impact on suppliers of TV sets to Ukraine they are also forced to raise prices and reduce import) Difficult financial situation for Ukrainian manufacturers (difficult financial situation of Ukrainian manufacturers has resulted in decrease in production of goods); Reduced financing of new projects (market development directly depends on updating and enhancement of product lines, for the last two quarters, the tendency towards reduction is observed). Diagram 1.3.1 Calculation of the Capacity of TV Set Market in Ukraine. 2008 through the first and the second quarters 2009 (thousands TV sets) 2008 558,8 1847,5 6,2399,7 I half 2008 302,8 903,75 3,5 49,8 1252,6 I half 2009 158,9 128,4 3,1 259,9 544,1

* -estimation

2. Production and Sale 2.1. Production and Sales of Home Television Sets (All Types), in numbers Production of TV sets in Ukraine in January through July 2009 reduced by 54.2% or by 187,900 TV sets when compared to the same period in 2008 (to 158.900 TV sets). In July, production of TV sets in Ukraine reduced by 75.5%, or by 33,200 TV sets when compared to the same period in 2008 (to 10,800 TV sets). Diagram 2.1.1 Production of Home Television Sets (All Types) in Ukraine in 2008, in thousands TV sets Month January February March April May June July August September October Noveber December Amount 61,4 57,5 62,6 32,4 42,1 46,30,57,26,3

40 46,5 74,8 68,9

2.2. Production and Sales of Home Television Sets (All Types), in money terms Volume of TV sets in money terms was growing 2006 through 2008. For instance, market capacity of TV sets manufactured and sold in 2006 was 80.8 million USD, and in 2008 it was equal to 126.4 million USD. There are several reasons for such a growth. They include without limitation: - annual increase in volumes of products manufactured till 2008; - price growth due to inflation; - introduction in the market of innovative and more technically enhanced products. Diagram 2.2.1 Volume and Sale of Home Television Sets (All Types) 2006 through 2008, in money terms (million USD)

100 80,2008

26,4 18,5 4,CRT LCD 2,07 I half.2009 Plazma

2,59 2007

126,4 96,2
Market growth in 2007 was equal to about 16 percent, and in 2008 growth was at the level of 23.8% when compared to the same period proceeding year.
3. Foreign Trade 3.1. Export (Structure, Geography) Structure of export of home TV sets 2008 through the first and the second quarters 2009 is demonstrated in charts 3.1.1 and 3.1.2. Volumes of export of home TV sets 2006 through 2008 has been gradually decreasing. It has been conditioned by minor competitor ability of Ukrainian products in the world market.
Diagram 3.1.1 Structure of Export of Home Television Sets in Ukraine, 2006 through the first and the second quarters 2009, thousands TV sets

I half. 2009

8590 6646
Since the crisis has become to be felt, consumer preferences have shifted mainly towards the low price segment. In addition, the law was adopted in Ukraine (13% markup for the goods of non-critical import) with the purpose to support national manufacturers and stabilize currency balance in the country. National manufacturers have made efforts to make use of such factors, and they has started negotiating contracts with other countries and sell products that has accumulated in large amounts at their warehouses. Diagram 3.1.2 Structure of Export of Home Television Sets in Ukraine, 2006 through the first and the second quarters 2009, % TV sets

0,00% I half. 2007 -10,00% -15,05% I half. 2008 I half. 2009 -9,91%

-20,00%

-40,00%

-42,00%

-50,00%
However, due to crisis manufacturers has faced rather difficult financial situation, and this factor has not allowed manufacturers to increase export, moreover, export has even decreased.
3.2. Import (Structure, Geography) Comparative structure of import of home TV sets for the period 2008 through the first and
the second quarters 2009 is provided in charts 3.2.1 and 3.2.2.
Diagram 3.2.1 Structure of Import of Home Television Sets in Ukraine in 2008, by countries Unit of measurement TOTAL I. CIS countries AZERBAIJAN BYELORUSSIA KAZAKHSTAN KYRGYZSTAN MOLDAVIA RUSSIAN FEDERATION kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) Amount 14675384,2 1847919,0 91030,3 5645,0 86,0 3,0 75047,0 4076,0 268,0 8,0 48,0 1,0 35,0 1,0 14773,3 1531,0 Cost, thousand USD 161637,3 476,6 0,6 323,0 0,3 0,0 0,2 151,1
TAJIKISTAN TURKMENISTAN UZBEKISTAN II. OTHER COUNTRIES EUROPE AUSTRIA BELGIUM GREECE DENMARK SPAIN ITALY LATVIA LITHUANIA LUXEMBURG HOLLAND GERMANY NORWAY POLAND PORTUGAL RUMANIA SLOVAKIA SLOVENIA UNITED KINGDOM HUNGARY kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) 100,0 2,0 20,0 1,0 653,0 22,0 14584353,9 1842274,0 4255100,9 263392,0 29,0 1,0 30740,1 941,0 21,0 3,0 1593,0 30,0 160325,2 6579,0 6119,2 161,0 57,3 3,0 1472,0 811,0 20,0 1,0 8856,0 692,0 624227,9 41474,0 47,0 3,0 528600,6 77858,0 154,0 9,0 1229,3 171,0 1369129,4 57210,0 350,5 17,0 73577,3 2194,0 1148234,0 65178,0 0,1 0,1 1,2 161160,7 81773,3 0,1 552,5 0,1 23,9 3554,7 105,9 0,6 27,5 0,1 235,1 9409,2 0,3 4783,7 1,2 56,5 28330,6 8,4 1893,1 27015,3
FINLAND FRANCE CZECH REPUBLIC ASIA HONG KONG ISRAEL INDONESIA CHINA KOREA, REPUBLIC MALAYSIA MONGOLIA UNITED ARAB EMIRATES TAIWAN THAILAND TURKEY JAPAN AMERICA MEXICO USA kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) 543,8 171,0 2272,6 188,0 295873,9 9135,0 1627,7 562,0 10326868,9 1578436,0 19714,5 3495,0 35,0 7,0 164825,9 20295,0 6944640,7 1062673,0 1091852,4 312707,0 1351744,4 63849,0 85,0 3,0 100,0 3,0 127788,8 51267,0 262374,8 13840,0 127822,5 41242,0 235885,1 9055,0 2384,2 446,0 550,6 14,0 1833,6 432,0 11,2 82,4 5175,3 505,7 79120,6 121,1 10,4 865,3 47258,7 15092,8 5894,5 0,1 0,3 2301,9 1118,4 1867,1 4590,1 266,8 47,8 219,0

Diagram 3.2.2 Structure of Import of Home Television Sets in Ukraine in the first and second quarters 2009, by countries Unit of measurement Amount Cost, thousand
USD TOTAL I. CIS countries AZERBAIJAN BYELORUSSIA KAZAKHSTAN RUSSIAN FEDERATION UZBEKISTAN II. OTHER COUNTRIES EUROPE AUSTRIA BELGIUM DENMARK SPAIN ITALY HOLLAND GERMANY NORWAY POLAND PORTUGAL SLOVAKIA UNITED KINGDOM HUNGARY FINLAND kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. 441920,9 128426,0 13181,7 1658,0 15,0 1,0 7991,0 405,0 66,0 3,0 4887,7 1239,0 222,0 10,0 428739,2 126768,0 34637,1 1641,0 163,0 5,0 32,0 5,0 2114,2 38,0 2524,2 90,0 743,7 15,0 83,0 4,0 11766,6 494,0 44,0 4,0 2311,9 239,0 231,0 17,0 4979,2 234,0 79,5 16,0 6603,9 282,0 1202,0 5534,5 53,0 0,2 34,5 0,2 17,7 0,5 5481,6 1121,8 1,7 2,1 42,1 44,6 10,9 0,5 63,8 12,3 82,3 20,5 119,0 5,9 139,2 26,1
(quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) kg. (quantity) 162,0 532,0 2,0 1102,0 33,0 125,0 1,0 393499,0 125091,0 9,0 6,0 216792,1 70803,0 90374,1 47874,0 3473,6 213,0 49,0 3,0 3976,8 711,0 65272,4 4644,0 3900,6 266,0 9651,5 571,0 603,1 36,0 72,8 28,0 530,3 8,0
FRANCE CZECH REPUBLIC SWITZERLAND ASIA INDONESIA CHINA KOREA, REPUBLIC MALAYSIA MONGOLIA TAIWAN THAILAND TURKEY JAPAN AMERICA MEXICO USA
381,8 20,5 148,6 4260,2 2,1 1554,2 1999,0 72,5 1,0 71,3 255,5 121,1 183,4 99,6 14,0 85,6
Diagram 3.2.3 Structure of Import of Home Television Sets in Ukraine 2006 through the first and the second quarters 2009, thousands TV sets

2000000

1847919

1600000

1200000

1080587 793712,0

800000
Import of home TV sets for the period 2006 through 2008 was at a high level. For instance, in 2008 import became more than twice as much as the figures for the proceeding year. The Ukrainian TV set market experienced a real boom supported by consumer credits (loans). Therefore, it may be concluded that the market of imported TV sets in 2008 was at the height of its development (models from medium and high price segments were mostly preferable). As the crisis has become to be felt, market situation has changed significantly. It became almost unprofitable to import new products to Ukraine. It was conditioned by several reasons. - governmental 13% duty for the goods of non-critical import; - reduction of consumer credits and raise of credit interest rates; - decrease in salaries and reduction of buying capacity as a result of this.

4. Basic Market Operators (TOP 15) 4.1. List and Description of the Basic Market Operators Seven basic operators are available in the Ukrainian TV set market. They occupy the largest market share. For instance, aggregate share of these operators was equal to 89 percent in the first and the second quarters 2008, but it has somewhat decreased in the first and the second quarters 2009 (to 81 percent) due to crisis phenomena and appearance of minor operators that started aggressive pricing policy with the purpose of occupation of own niche. Nevertheless, leading operators continue retaining their leading positions in the market due to quality of the goods offered and numerous options and opportunities provided by service centers located almost in every point in Ukraine. Such market operators include without limitation Samsung, LG, Philips, Sony, Sharp, Toshiba and Panasonic. Minor manufacturers that occupy small market share include without limitation Daewoo, Hitachi, JVC, HANNspree, Pioneer, NEC, Orion, Electron. As a rule, these manufacturers are introduced in one of market segments, i.e. CRT, LCD or plasma. When a manufacturer is available in several segments, the choice provided by such a manufacturer is not large, and it does not exceed 20 to 30 names as a rule. As a rule, such companies benefit due to reasonable prices, though exceptions are still available. Samsung Samsung was founded in 1969. A year of cooperation with Sanyo Electric has led to merger and appearance of Samsung Electronics Corporation. Company consolidated sales were equal to 103.4 million USD in 2007. Samsung Electronics employs about 150,000 employees working in 134 offices in 62 markets. The Company has five main units: Digital Appliance Business, Digital Media Business, LCD Business, Semiconductor Business and Telecommunication Network Business. rd Address: 3 level, 3 Spaska St., Kyiv 04070; phone: (044) 490-64-53, 490-64-24, phone/fax: (044) 490-64-94, hot line 8(800)502-00-00. www.samsung.com.ua LG LG Electronics Inc. (headquarters located in Seoul, South Korea) was founded in 1958 and is now a recognized world leader in the sphere of electronics, information and telecommunication technologies. 1996 LG Electronics has established its representation office in Ukraine with the purpose to inform potential buyers about LG products. In the worldwide scale, sales were equal to 11.3 billion USD in 2008 that is 1.2% higher than proceeding year. Address: LG Electronics Representation Office, 1 Dniprovsky Spusk, Kyiv. phone: 8(044)201-43-504 fax: 8(044)201-43-73; hot line: 8(800)303-00-00 www.ua.lge.com Philips The Company was founded in 1891. Nowadays, Philips is one of the major transnational world companies with sales equal to 26.7 billion Euros in 2007. Manufacturing facilities are located in 28 counties, and the products are sold in 150 markets. Costs for research and development were equal to 1.6 billion Euros in 2007, i.e. 6.1 % of total turnover. th Address: 7 level, 4/6 Grinchenko St., Kyiv 01042. phone :( 044)490-98-48, fax 490-98-56. www.philips.com; http://www.lighting.philips.com/ua_uk; Sony Company was founded in 1946. Sony manufactures audio and video players, mp3players, DVD-players, projecting and LCD-TVs, monitors and electronic components. Among the company's products such brands as VAIO, Bravia and Walkman. Sales for the 2008-09 - $ 80 billion, net loss - $ 1 billion. Representative Office in Ukraine Spasskaya Str, 30, Kiev, 04070 Phone: (044)490-63-11, (044)490-63-29 http://www.sony.ua Contact of the information center for consumers JSC Sony CIS Karamyshevsky passage, 6, Moscow, 123154, Russia, Phone: 8-( 800) 307-66-90, +7 (495) 25876-50 Sharp History of Sharp Corporation began in 1912. Currently, SHARP is a broad network of subsidiaries engaged in manufacturing and

marketing of products, as well as several large research centers and laboratories involved in the development of new technologies. Sales of Corporation in 2009 (ended March 31, 2009) - $ 29.45 billion, losses - $ 1,3 billion Company does not have a representative Office in Ukraine. The official distributor is MTI (Mega Trade International). Address: retail center "Caravan", second floor, Lugovaya Str., 12, Kyiv, 04074. Brand-Manager of MTI IT-distribution Division for LCD TVs SHARP - Elena Biloborodko e-mail: biloborodko@mti.ua Phone: 8 (044) 581-51-21 ext.3457 www.sharp.mti.ua Toshiba Toshiba (Tokyo Shibaura Electric Co., Ltd.) was founded in 1939 from two companies: Tanaka Engineering Works and Hakunetsusha & Co. Company's revenues in 2008-2009 (ended March 31, 2009) - $ 66.239 billion, net income - $ -3.420 billion (decline of 406.5%). Losses associated with the rejection of the further production of HD DVD-players and recorders. Toshiba lost in the so-called "Format war" technology Blu-ray. Address: Representative Office is located in Ivan Lepse Str. 4, Kiev. It is opened from July 10, 2008. Phone: 8 (044) 351-13-16 www.toshibaua.com Address (exclusive provider of Toshiba technology in Ukraine): Ochakovskaya, 5 / 6 Str. Kyiv, 03151. Phone: (044) 490-92-78 fax (044) 275-99-99 e-mail: toshiba_department@datalux.ua Panasonic Founded in 1918, but was known as Matsushita Electric Factory, renamed Panasonic Corporation in 2008 to strengthen the position of Panasonic brand in the market of household appliances. Corporation includes 638 enterprises. It owns a controlling interest of JVC. Total staff includes 328 thousand people. Revenues for the year ended March 31, 2009 - $ 82 billion. Loss was ($ 4 billion) Panasonic Information Center in Ukraine established in 2005. Address: PO Box 441, Kiev-150, Ukraine, 03150, Phone. 8 (044) 490-38-98 www.service.panasonic.ua /RUS/infocenter.php Daewoo Company was founded in March 22, 1967 Daewoo Electronics opened its representative office in Kiev in March 29, 2004. Company is liquidated at the moment, but the company's products are still sold from warehouses in Ukraine. www.daewoo.ua Hitachi Hitachi was founded in 1910. Company is headquartered in Tokyo. Hitachi group includes 1100 companies: Consolidated subsidiaries (450 companies in Japan, 484 - abroad); Unconsolidated subsidiaries (79 companies in Japan, 86 - abroad). In Ukraine there is no official representative office of the company. Service and guarantees issues are solved by shops that sell equipment of the company. JVC Company was founded in 1927. From the mid off 60th a controlling interest was owned by Matsushita (owner of the trademark Panasonic). The company manufactures consumer equipment, computers, audio and video equipment, software, media products. The total staff is 35000 people Company has a representative office in Ukraine. Address: Museum Alley, 4, Kyiv, 01001 Phone: (044) 490-70-20, (044) 490-70-18. www.jvc.ua www.jvc.ua HANNspree Company HANNspree is a global leader specializing in the production of LCD TVs with a unique and exclusive design. Company was founded in 2004 as part of HANNstar corporation. HANNstar corporation is the one of the leading manufacturers in the market of TFT LCD which exists since 1998. HANNspree employs more than 800 people and 100 engineers engaged in research and development in Taiwan and China. In Europe HANNspree offices are located in 4 countries: Germany, Italy, UK and France, with headquarters in Willich, Germany. Company does not have a representative office in Ukraine. Sales are conducted through a network of electronics stores such as "New Star, Technos, etc., as well as online stores. Pioneer Pioneer is a manufacturer of electronic and audio-video equipment for houses, cars, commercial and industrial enterprises. Company

was founded in 1938 in Tokyo. Turnover of the company in 2008-09 - $ 5.76 billion, losses - $ 1.34 billion. Company has branches in 12 countries in Europe. Company does not have a representative office in Ukraine. However, in Ukraine there is an Internet office of Pioneer hifi, which is an official dealer of the company. Tel: 8 (057) 771-47-27 www.pioneer-hifi.com.ua e-mail: info@pioneer-hifi.com.ua NEC NEC (Nippon Electric Corporation) is a Japanese company which is a manufacturer of electronic, computer and telecommunications equipment. This company is a one of the world's largest telecommunications companies. Head office is located in Tokyo. Company started its activities in 1899. Staff of the company consists of 150 thousand people. Company has 18 offices in 18 countries, 23 plants in 12 countries and 4 research centers in 4 countries, 61 company for marketing in 26 countries. Company's turnover in 2008 was about $ 41.9 billion, profit was $ 2.9 billion Media-Trade Ukraine is the official dealer of NEC in Ukraine. Address: Degtyarevskaya Str, 43; Kiev, 03113 Phone: +38 (044) 227-15-82 www.mediatrade.com.ua e-mail: info@media-trade.com.ua Orion A factory for production of radios and other electronic devices was founded in 1913 in Hungary. The company's goal was to create a whole range of electronic devices people use in everyday life. Company can be contacted through the site, by sending a message. Also through the site a person can get a different kind of advice and can contact partners of the company. www.orion.ua Concern was founded in 1989. At the moment this is a concern, which includes 14 scientific - industrial, industrial, and service companies. This is practically the only enterprise in Ukraine, which produces TVs in the country. Television Works "Elektron" is a subsidiary of JSC Concern-Electron. Address: Storozhenko Str., 32, Lvov, 79000 Tel: 8 (032) 239-52-65, 239-53-76 www.electron.lviv.ua
4.2. Structuring of the main operators Operators of the market can be structured according to the segments where they operate. Segments of the television market are: CRT, LCD, plasma and OLED - Displays. Diagram 4.2.1 Structuring of operators according to the TVs Segments Name of operator Samsung LG Philips Sony Sharp Toshiba Panasonic Daewoo Hitachi JVC HANNspree Pioneer NEC Orion CRT + + + + + + + LCD + + + + + + + + + + + + + Plazma + + + + + + + + OLED + + * - estimation
Only 2 companies (Sony and Samsung) have been represented in the segment of the most progressive and expensive products. These companies produce TVs OLED. However, Sony has in the Ukraine market only one model (11 inch TV), while Samsung represented by 11 widescreen TVs with 32 and more inches. Thus, only Samsung has been represented in all market segments. Other companies focus their production only in certain segments.

4.3. Market shares of the main operators In the TV market of Ukraine there are seven basic operators, which occupy more than 80% of the market. Shares of the main TV manufacturers for 1 Q 2008 and 2009 are provided on diagrams 4.3.1-4.3.2. It is worth noting while comparing figures that Samsung (market leader) significantly lost their positions this year. This can be explained by the fact that the company's competitors began to promote their products actively. A variety of advertising campaigns and presentations for customers attraction also contributed to the increase in market share for such manufacturers as Panasonic and Sharp. Thus, by reducing the share of Samsung in the market, there has been growth in the market shares of other companies. Diagram 4.3.1 Market shares of main producers in IQ 2008 according to the sales of TVs

Philips 12%

LG 15%
Sony 9% Sharp 4% Toshiba 4% Panasoni c 3% 19%

Samsung 34%

* - estimation
Comparing figures 1Q 2008 and 1Q 2009, there has been substantial growth in market share of other operators at 8%. Thus, their combined market share grew in 1Q 2009 from 11% to 19%.

LG 14%

Philips 15% Sony 8% Sharp 2%

Samsung 46% 11%

Toshiba 2% Panasoni c 2%
The largest share of the market in 1 Q 2009 has Samsung - 34%. Significantly far behind the leader are companies LG and Philips. They occupy 15% and 12% of the market respectively. Diagram 4.3.2 Market shares of main producers in IQ 2009 according to the sales of TVs
5. Price and pricing on the market 5.1. Price situation on the TV market (analysis of the price structure) Domestic prices of TV sets in the national currency remained at its pre-crisis level, so demand has shifted in favor of cheaper models. For example, the average cost of LCD-TV up to the sales of IQ 2009 was $ 670, which is 20.7% below the same period of 2008. If in the IQ of last year, the price of the most popular TV was $ 750-1000, then up to the same period of 2009 the price is $ 500-750. Budget models has the largest share of sales in Ukraine, the middle price segment has about 15%, while premium segment has about 6%. Price preference of Ukrainians coincide with global trends: the consumer wants to buy a functional and reliable apparatus for a reasonable price. Diagram 5.1.1 Price Segmentation in the TV market of Ukraine

High 6% Medium 15%

The smallest price decrease from 2005 was for CRT TVs (from $ 187 to $ 156). The decline in this segment estimated as only 16,5%. Regarding LCD TVs, the situation is different. In the market there was more dynamic decrease in the average prices of similar models. The price in 2005 was $ 928, and in 1 half of 2009 already estimated as $ 670. The estimated decrease during this time period was 27,8%. However, the greatest decrease in average price was estimated in the segment of plasma TVs (from $ 2080 in 2005 to $ 950 in 1 half of 2009). The reduction amounted to 54,3%. The reasons for reducing the average price for different types of TVs are different.
CRT TVs. Not represented in Ukraine. LCD TVs. Sony as well as Samsung has a very broad model line of TV. At the moment it includes 133 models. Diagonal size varies from 19 to 70 inches. Range of prices - $ 385 - $ 5185 (average price of a model 70 inch Sony KDL-70X3500 is $ 45,610). Plasma TVs. Not represented in Ukraine. Sharp CRT TVs. Ukrainian market at the moment consists of 6 models of CRT TVs. Price range is $ 95 - $ 350. LCD TVs. Product Range consists of 59 TVs. Price range: $ 303 - $ 8055 (depending on the size of the diagonal - from 19 to 65 inches). Average price of a model with diagonal 65 inch is $ 12105. Plasma TVs. Not represented in Ukraine. Toshiba CRT TVs. Not represented in Ukraine LCD TVs. Range of products represented in Ukraine includes 42 TVs with diagonals from 15 to 52 inches. These models are in price range $ 250 - $ 2605. Plasma TVs. Not represented in Ukraine. Panasonic CRT TVs. Not represented in Ukraine. LCD TVs. Represented by a small number of models. Only 10 models of TVs with diagonal size from 20 to 32 inches are represented in Ukraine. Price range of these products varies from $ 405 to $ 1270. Plasma TVs. Unlike LCD TVs, plasma analogues are represented in Ukraine market by a wide range of TVs - 37 units. Diagonal size is up to 103 inches (average price of TV with 103 inches - Panasonic TH-103PF10RK is $ 38260). Price range varies from $ 770 to $ 38260. Daewoo CRT TVs. This producer has the widest range of products in this segment. It includes 6 models. LCD TVs. Not represented in Ukraine. Plasma TVs. Represented by one model, which costs $ 575.