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
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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

Source: Contracts

- CRT The history of CRT TV sets numbers over one hundred years. Kinescope (picture tube) is the basic part of a CRT TV set. Kinescope screen is covered with phosphorous containing content. Flow of electrons (electron beam) makes phosphorous pixels light red, green or blue light. Electron beam moves making a color line consisting of active pixels. Then, it moves down and creates the next one, etc. Speed of beam movement is high, and eye perceives the integral picture. Technology retains rather large potential. Leaders of TV industry continue producing CRT TV sets to every fancy. Although displays are not so large as projection systems, a wide scope of technical solutions makes CRT an attractive option for clients with different demands. Currently, models with convex, flat and super flat kinescopes are available. Price of a TV set with a convex kinescope varies within the limits of several hundreds USD. That is why anyone can afford it. Most buyers are entirely satisfied with the features of such a kinescope. Flat kinescopes are deemed a modern tendency in CRT development. LG (Super Flat), Sony (Super Trinitron) are the few brands which offer TV sets with super flat display. Quality of picture on such a screen is comparable to the quality of a picture behind the window glass. Such displays have wide angle and stylish modern design. Currently, four basic types of large CRT TV sets depending on their size are available 28, 29, 32 and 34 inches. The second group is the most popular and numerous: number of
models presented in the market is calculated nearly in hundreds. Unlike more compact TV sets, they are the most difficult for choice since they are technically sophisticated. To make the right choice, it is first of all necessary to determine the format of your future TV set - 4:3 or 16:9. To watch TV programs or video, 4:3 format TV set is the best choice (29, 34 inches); to use DVD, 16:9 display (28 and 32 inches) is more preferable, since it allows experiencing atmosphere of the cinema. Scan of a CRT TV set is not the least important factor. Normal television broadcasting is performed with transmission of 50 half-frames during one second and with the relevant display of such half-frames on the screen. It means that 50 half-frames are displayed within one second. In this case, we are speaking about 50 Hz technology. In case of 100 Hz technology, every half-frame is stored in TV receiver, and its display is repeated. It results in reduced flickering effect and quieter picture. 100 Hz technology itself has several drawbacks which include but not limited to video capture and digital loop in case of rapid movement of objects. To avoid these drawbacks, different technologies are used, for example, Digital Mastering or Digital Natural Modion. Some models have in-built processors of home cinema Dolby Pro-Logic and Dolby Digital (with backside acoustics provided) which allow creating home cinema by connecting of video or DVD player. Nevertheless, in spite of the fact that such systems are user friendly, from the point of view of quality, they are worse than systems with additionally connected AV amplifier (receiver) and acoustics. - Plasma This term may imply two devices that are indistinguishable from the point of view of exterior, but quite different from the point of view of their essence: plasma TV set and plasma panel. The former has all attributes pertaining to any TV set it receives TV programs and displays them with sound which is played via inbuilt speakers. It means that it is a ready for use self-sufficient product. The matter is quite different with plasma panels: panel means simple screen (or display) which does not have any in-built TV tuner, and it is not a TV set at all. The principle of functioning of any plasma screen/display (PDP - Plasma Display Panel) is based on the controlled cold discharge of gas (as a rule, xenon and neon) that is in ionization state. It is all called cold plasma - wherefrom the name comes. Like everywhere, dot or pixel is a minimum picture unit on the screen. In plasma display, a combination of three subpixels is used to generate color of every separate dot; every such subpixel corresponds to one of three main RGB colors (Red, Green and Blue). Cells are located between two glasses with distance between them equaling to 0.1 mm (100 micron). During the electric pulse on electrodes, part of charged ions starts UV emission. In most cases, radiation or emission band depends on gas used in a certain model. UV rays act upon special fluorescent covering which emits visible light. UV rays are very dangerous for human eye, but in this case up to 97 percent of harmful emission is absorbed by external glass. Brightness and color saturation may be regulated by simple change of control power: the more intensive power is, the more photons are radiated by gas, the more intensive light fluorescent film has, the brighter picture on the display we obtain. Operational life of plasma panel or TV set does not mean the time of plasma breakdown, it means an expected time of loss of initial image intensity and brightness. Nevertheless in spite of such a parameter, it is not worth concentrating on it specially, since life of filling (electronic or technical), which is available in plasma in large quantities, is essential as well. According to their sizes, plasma TV sets are conditionally divided into three basic groups less 40", 4149 and 50 and more. The second group has the largest number of products where plasma panels of almost all wellknown manufacturers are available (especially it concerns 42). It is connected with the lack of benefit of production of small plasma panels and insufficient demand for large plasmas (60, 61, 63") on the other hand due to their expensiveness and lack of superiority with regard to definition when compared to smaller panels. The higher level of intensity and brightness, the better it is for plasma panel and the brighter and more saturate the displayed picture is. Values of brightness for plasma panels are within the range from 450-500 candelas per quarter meter in relatively nonexpensive 42- 50 to 1,400-1,500 candelas per quarter meter in more technically updated models. With regard to definition, this parameter directly influences number of pixels on the screen and the texture of the image respectively: the higher the definition is, the more pixels are available and the more homogenous the image will be respectively. The

Source: Goskomstat

Production Import Export Carry-over stocks Volume
Monthly dynamics of TV set production in 2008 demonstrates relative stability, seasonal declines in production are observed. However, in December 2008, when crisis phenomena have just started having negative impact, more than twofold decline in production is observed (from 54,000 to 26,300 TV sets). Decline in production was about 52 percent in relation to the proceeding month. Diagram 2.1.2 Production of Home Television Sets (All Types) in Ukraine in the first and the second quarters 2009, in thousands TV sets Month January February March April May Amount 17,1 24,2 29,6 30,1 28,3
According to the data provided by the State Committee of Statistics, export decrease in the first and the second quarters 2009 was about 11.4% when compared to the same period proceeding year. It is conditioned by 47.4% decrease in products manufacture (when comparing figures for the first and the second quarters for 2008 and 2009). On the whole, it may be stated that market capacity has become more than twice as little when compared to proceeding figures.

June July 18,8 10,8

When comparing production volumes in the first and the second quarters in 2009 with the same period proceeding year, it is worth stating that production became two and a half or even three times as little. The period from March to May is an exception when increase in
production is observed when compared the other months in 2009. It is most likely conditioned by introduction of 13% markup for the goods of non-critical import. It has resulted in an opportunity for the national manufacturers to raise production and occupy part of the market.
Diagram 2.1.3 Production of Home Television Sets (All Types) in Ukraine in 2008, %
60,00% 45,21% 40,00% 29,94% 30,45%

20,00% 8,87% 0,00%

y ch ar ar ru M -20,00% b Fe -6,35% il pr A ay M ne Ju

11,16% -5,98%

-5,92% t r r r er us be be be b to ug m ve m c A te ce O No ep De S -31,14%

-40,00% -48,24% -60,00%

-51,30%
In the end 2008, decline in production is observed. It is mainly conditioned by negative influence of world crisis and difficult financial situation of manufacturing companies. Decline in
production started in November 2008. Towards the end of December, it was equal to 51.3% in relation to the proceeding month.

60,00%

Diagram 2.1.4 Production of Home Television Sets (All Types) in Ukraine in the first and the second quarters 2009, %

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

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

Low 79%

*- estimation
To pay declining revenue from sales of devices of mass segment producers try to market expensive models. Manufacturers expect that demand for the premium segment products does not change, because wealthy people are less subjected to crisis. A number of companies in 2009 started to sell ultrafine TVs with LED backlight with diagonals of 40 inches. Price of such devices on the Ukrainian market will start with a mark of $ 1500. Domestic market suffered mainly because of the impressive exchange rate fluctuations. In Europe and the U.S. price of TVs in the local currency declines, so manufacturers continue to produce expensive devices and sell them in all
Thus, we can conclude that the main producers of CRT TVs on the market are: Sharp and LG. These manufacturers offer their products in the TVs segments - 14, 21, 29 inches and 15, 21, 29, respectively. The most expensive are TVs produced by Sharp. TVs produced by Samsung are in the middle price range.
Diagram 5.2.2 Average prices of LCD TV's produced by the leading companies ($) Model name Samsung LG Philips Sony Sharp Toshiba Panasonic Daewoo Hitachi JVC HANNspree Pioneer NEC Orion Electron 21 353,8 367,6 371,1 537,8 352,4 382,625,9 242,5 22-391,554,4 547,Length of diagonal 26-29 30-32 34-42 473,1079,651,2 1002,4 625,5 793,643,1293,6 690,8 690,8 1205,610,4 974,736,2 1078,641,1 1000,1753,3 2241,5 2373,8 2239,7 1689,3013 * - estimation
In Ukraine, the range of LCD TVs is very diverse. In order to properly evaluate the pricing policy of the market operators the entire models according to the diagonal must be classified. The main categories which are presented in Chart 5.2.2 were selected. In each segment of the market (measured by the length of the screen diagonal) different companies show different pricing policy. For example, in the range of TVs up to 21 inches the most expensive products offered by HANNspree, then follow Sony and Panasonic. In the range of diagonal 22-25 inches the price leaders are Sony, Sharp and Philips (in descending order). Panasonic Products in this segment is not represented.
In the range of 26-29 inches, the first 3 positions on the price took such producers as HANNspree, Sharp and Sony. In the range of 30-32 inches the leaders are HANNspree, Pioneer Philips. In the segment of large-format televisions (34-42 inches) the price leaders are HANNspree, Pioneer, Sony. As for TVs over 43 inches the price leader is Pioneer, then follow Sony and Philips. The most budget models presented in the market are produced by JVC. Thus, HANNspree, Sony and Sharp provide the most expensive products in every form factors of LCD TVs for the TV market of Ukraine. Samsung offers the most average prices in the market. Toshiba and LG offer the lowest prices for its products. Diagram 5.2.3

Average prices of plasma televisions produced by the leading manufacturers ($) Model name Samsung LG Philips Sony Sharp Toshiba 21 22-25 Length of diagonal 26-29 30-32 34-42 954,2 581,5 984,3 1059,2168,1404 -
Panasonic Daewoo Hitachi JVC HANNspree Pioneer NEC Orion Electron 1336,1847,2 1646,4259,5 * - estimation
Analysis of prices of plasma display panels was conducted on a similar structure with the analysis of LCD TVs. It should be mentioned that in the segment of plasma TVs manufacturers Sony, Sharp and Toshiba are not represented in the Ukrainian market. Another feature is that a lot of plasma TVs available on the market is concentrated in the segment with 34-42 inches and more than 43 inches. The most expensive models of plasma TVs are TVs with 34-42 inches produced by Pioneer, then TVs produced by NEC and Panasonic. TVs produced by Daewoo in this segment is the cheapest. In a segment of more than 43 inches price leaders is NEC, however, in second place is company Pioneer, then Panasonic. The most budget models in this segment are TVs produced by Philips.
Diagram 5.3.1 Dynamics of TVs average prices in ($)

2008 I half. 909 2012

Plazma
5.3. Dynamics of average prices of TVs for the period 2005-2009 It is worth noting that on the TV market there is a tendency to reduce the prices of all types of TVs. However, the amount of decrease in average price, depending on the type of TV (CRT, LCD or plasma) and it is different. The most expensive are plasma TVs, but they are not as common as LCD, the price of which is acceptable to most consumers. The most common are CRT TVs, however, the price for them is much lower than on LCD TVs or on plasma TVs. This is because CRT technology has long been on the market and is technically old, it is not able to fully meet consumer preferences for quality of the image.
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.

7. Consumption of goods

Lower 500$ 500750$ 7501000$ I Q 2008 10001250$ 12501500$ More 1500$ 32
It can be said that LCD TVs have finally replaced the outdated CRT TVs. It happened on the market of Russia as well as on the Ukrainian market. CRT still has high popularity, but mainly due to low prices and availability. At the moment more consumers prefer to buy expensive, but much more advanced LCD TV. It should be mentioned that sales of CRT TVs take place in ordinary stores, while LCD TVs is mainly sell through online stores. The reason of this lies in the fact that CRT TVs buy people, who are far from technology development; often these people dont have an access to the Internet. Plasma TVs are gaining popularity thanks to the good image, excellent viewing angles, lack of tail area in dynamic scenes and possibility of production models with a diagonal size more than 60 inches. However, there are some disadvantages: short lifetime (about 20 thousand hours of continuous operation), burnout of pixels when using static image, as well as the weight of panels, which causes inconvenience when installing it. Moreover, builtin cooling fans utter faint noise, which becomes especially noticeable after three hours of continuous operation. There is a slight increase in the market of projection equipment. Now, projectors can be bought not only by companies for the office presentations but also by ordinary users who want to create home theaters. However, the percentage of those buyers is still very low. However, the economic crisis still left a negative impact on the TV market. This is mainly affected the development and application of new technologies. Manufactures do not want to risk and they are slow to invest big money into research. For example, investment in such a promising but expensive technology as OLED was reduced. Diagram 7.1 Changes of customer preferences about prices when buying LCD TVs during the year, %

I Q 2009

Source: Contracty
Accordingly, these TVs (TVs which is in requisition now) can be divided into 3 price categories: low (below $ 750), medium (from 751 $ to 1500 $) and high (more than 1501 $). The most popular category at the moment is the low price category. Diagram 7.2 Distribution of consumer preferences according to the screen resolution

11% 19201080 5% 640480 11% 1024768 3%

1366768 70%

The most popular resolution for consumers is 1366x768. The percentage of consumers who choose this screen resolution is 70% (this is the best for watching DVD movies and TV broadcasts). Resolution with the size 1920x1080 gives to a user the most comfortable view for watching programs or movies, but it takes only 5% in consumer preferences. A reason for this distinction is the high price of devices that support such screen resolution. It should be mentioned that in case of price reduction for TVs with resolution 1920x1080 pixels, as well as elimination of
defects, the number of consumers who may choose TVs with this screen resolution will grow. Below there is a rating of the most popular TVs produced by the main producers in stores as well as their price range: Samsung CRT TVs. Samsung CS-29A730 ($234450); Samsung CS-29Z58HY ($238455); Samsung CS-29Z57 ($245394). LCD TVs. Samsung LE19A650A1 ($306500); Samsung LE32B350 ($422588); Samsung LE32B450 ($475670); Samsung LE32B551A6W ($595829); Samsung LE40B530 ($8091096); Samsung LE40B550 ($8551106). Plasma TVs. Samsung PS-42B450 ($740960); Samsung PS-42A451P1 ($7251110); Samsung PS-50A450P2 ($990 1670). LG CRT TVs. LG 15FJ4RB ($99123); LG 29FS7RLX ($208292); LG 29FS6RNX ($228390); LG 29FS4RNX ($234385). LCD TVs. LG 22LU4000 ($350453); LG 32LG2000 ($455685); LG 32LG4000 ($531839); LG 37LH7000 ($9101053). Plasma TVs. LG 42PG2000 ($6651108); LG 42PG6000 ($7861495); LG 60PS7000 ($3119 3468). Philips LCD TVs. Philips 22PFL3404 ($337467); Philips 32PFL5404H ($527711); Philips 32PFL5604H ($648879); Philips 37PFL9604H ($13011542); Philips 42PFL9703D ($16682525). Plasma TVs. Philips 42PFP5332 ($7691163). Sony LCD TVs. Sony KDL-19L4000 ($348436); Sony KDL-32V5500 ($725990); Sony KDL-32W5500 ($8301202); Sony KDL-40W5500 ($1125 1676); Sony KDL-52W4000 ($15752055); Sony KDL-46Z4500 ($16252403). Sharp CRT TVs. Sharp 21QF2U ($129145); Sharp 21SFX10U ($154174). LCD TVs. Sharp LC-20S5E ($295540); Sharp LC32DH77E ($785968); Sharp LC-46X8E ($11501541); Sharp LC-52HD1E ($2440 3156). Toshiba LCD TVs. Toshiba 19AV605PR ($287375); Toshiba 37AV500PR ($615860); Toshiba 42AV500PR ($7501222); Toshiba 40XF350PR ($10741899). Panasonic LCD TVs. Panasonic TX-R32LX80 ($508720); Panasonic TX-R32LX85 ($7401125); Panasonic TX-R37LX85 ($8251470). Plasma TVs. Panasonic TH-R42PV80 ($7561380); Panasonic TH-R42PV8 ($7151141); Panasonic TH-R46PY80 ($12402500). Daewoo CRT TVs. Daewoo KR-2930N ($241283); Daewoo KR-2930MT ($242283). Plasma TVs. Daewoo DPP-42H9 ($575925). Hitachi LCD TVs. Hitachi L42X01A ($13001450). Plasma TVs. Hitachi P50X01A ($25503671). JVC CRT TVs. JVC AV-1401UB ($90119); JVC AV2131QB ($166202). LCD TVs. JVC LT-32BX38 ($535630); JVC LT32FX38 ($489965). HANNspree LCD TVs. HANNspree HANNSa.red ($378870); HANNspree HANNSlounge 26 ($16201800). Pioneer LCD TVs.

There are 3 main sales channels for TVs. These include the following: retail sales through online retailers, large supermarket chains of electronics, as well as the signing of contracts at the major exhibitions of household appliances. Diagram 8.1 Structure of TVs sales through the main distribution channels, % Internet shops attract consumers with the help of lower prices than in electronics stores. Price is reduced due to fewer staff than in large supermarkets and less deductions for employees' wages. Weaknesses include relatively small volumes of sales, logistical difficulties and delays with goods delivery.

Exhibition 22%

Internet shop 27%

Supermar ket 51%

The largest international exhibitions include: CES (Consumer Electronics Show) in Las - Vegas; International 3GSM - Congress in Barcelona; The world's information technology, software, telecommunications, services, and CTI - solutions) in Hanover; IFA (International Franchise Association) in Berlin. Existing distribution channels can be ranked in order of decline following way: 1. Special exhibitions; 2. Large supermarkets of electronics; 3. Internet - shops. Each of them has its advantages. For example, as a rule at trade shows to sigh contracts to supply large quantities of equipment between manufacturers and distributors or representatives in various regions. Weaknesses include the logistical problems and additional costs for the presentation. In large supermarkets there are shop assistants who help customers to choose the right model of a TV. Weaknesses include usually overcharge for products, some supermarkets sell mainly cheaper TVs.
9. Summary. Forecast for the market capacity until 2011 Summary During market development of TVs in Ukraine and in the world producers make some changes to accents attributed its products. Producers tried to demonstrate models with the largest diagonal size to consumers in 2005-2006. One of the major trends in the market in 2007-2008 was the thickness of the proposed models. All brands tried to provide thin LCD panels or TVs based on organic light emitting diodes (OLED - Organic Light Emitting Diode). Most manufacturers have relied on green TVs in 2009, reducing their energy intensity, convergence of television and the Internet. For example, the level of electricity consumption in some models of Sharp's TVs is now up to 60W. There was also a stable tendency to develop three-dimensional television (3D). To use these TVs, you need to wear special glasses (for consumers with poor eyesight it would be difficult to do). Nevertheless, despite these difficulties, manufacturers do not stop in an effort to develop this area. Such trends will lead to the development of 3D-content: movies, games, etc. It should be mentioned that such TVs need a three-dimensional video signal, which must make serious adjustments in production of sources of this signal. This can lead to slow implementation of this technology on the market. On the other hand, the most promising and advanced technology OLED displays was left without proper attention. This technology is very capital intensive since it requires large financial infusions in the research and in the market in future. Not the least role in this issue played the global financial crisis which reduced the income of the leading manufacturers of TVs. It was one of the reasons why investment in the development of OLED technology is deferred until more suitable time. Despite these difficulties, it is worth mentioning that LCD TVs with LED backlight technology will become the most popular product in the Ukrainian TV market in the near future However, it should be mentioned that the price of such technological devices will be significantly higher than price on ordinary LCD TVs (up to 50% more expensive, depending on the model and manufacturer). Therefore, despite large potential of the market, sales of such TVs will be limited because of low level of solvency. Sharp increase in consumption of OLED TVs (the most priority direction of the Ukrainian TV market) is possible only with resumption of lending money by banks at pre-crisis levels or in case of price reduction. Forecast for the market capacity in 2011 It is worth mentioning that in the period from 2009 to 2011 domestic TV market will grow. By the end of 2009 the market will not develop actively. The first reason for this the market will be affected by the global crisis. The other reason is unsold products on warehouses.

Diagram 9.1 Forecast for the domestic TV market in 20092011, thousand units
1052 1324,7 0,1 1755,8 0,2 25,92% 32,54% 0,3 0,4
Resumption of the foreign manufacturers expansion on the Ukrainian market is expected in 2010. Growth of the market could reach 26%. Resumption of model lines of the main producers on the market and increase of competition among operators is also expected. These factors will positively affect the volume growth of the market. These major trends will also be relevant in 2011. It is expected to increase the market capacity to 32,5% (comparing to 2010) during this period. The increase will be occurred because of lower impact of crisis on the Ukrainian economy; the public confidence to the banking system will also increase and as a result of this increase of lending to the population (consumer loans). However, it is not expected to reach market capacity of pre-crisis level.
"- "" www.pro-consulting.com.ua , 02160,. , , 7-./: +38(044) 501-43-40; +38(044) 503- 63- 60 Financial and analytical group Pro-Consulting www.pro-consulting.com.ua 7-A Vozzyednannya Avenue Kyiv - 02160, Ukraine Tel: +38(044) 501-43-40; +38(044) 503- 63- 60
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