Will the Christmas buying season starting on Black Friday this year be the start of HDTV's transition to Ultra HD? That's what Nanotech Entertainment Inc. in San Jose, Calif,. is betting big on happening.
Will the Christmas buying season starting on Black Friday this year be the start of HDTV's transition to Ultra HD?
That's what Aaron Taylor, executive vice president of sales and marketing at Nanotech Entertainment Inc. in San Jose, Calif., contends and his company is betting big on it happening.
What are the signs that point to Taylor being right in his prediction? "One precursor was the Consumer Electronics Show in January this year where all the major Korean, Japanese, and Chinese television manufacturers were hawking their Ultra HD offerings," says Taylor. "4K (Ultra HD) clearly took center stage at CES 2014."
Furthermore, he contends, Chinese manufacturers bombed the price and made the sets affordable to the mass consumer market.
Will a large supply and lowering price be sufficient for consumers to buy Ultra HD?
To answer the question this discussion will examine the market data, view the consumer sentiment toward Ultra HD, test the thinking of content suppliers and pay TV service providers, and peek at the plans being drawn up by over-the-top (OTT) content suppliers to offer Ultra HD content.
OTT content providers see this as a major opportunity to offer premium content to consumers that will build brand and take viewers away from cable, satellite and over the air broadcast content providers.
A place to start this investigation on is the National Association of Broadcasters (NAB) Convention in Las Vegas.
Held the week of April 11 this year NAB featured a panel entitled "Consumers, 4K, and Next Generation Home Entertainment." Moderator Jimmy Schaeffler, president and co-founder of The Carmel Group, presented market data for Ultra HD unit volume shipments.
In the US last year 55,000 units shipped and the research predicted 481,000 this year, tripling to over 1.2 million in 2015 and doubling to 2.8 million units in 2017.
One consensus of the panel is that the analysts' estimates have been changing upward over time. On August 10, 2014, for example, Digitimes predicted worldwide Ultra HD unit shipments of 68.2 million in 2017 up from 1.5 million units shipped globally last year and over double the expected shipments of 30 million in 2015.
China to bring down cost
The disparity between global and US projections was explained by NAB panelist Brian Markwalter senior vice president of research and standard of the Consumer Electronics Association (CEA), who stated that large numbers of Ultra HD TVs were being shipped into China.
This conclusion was supported by the Digitimes report, Ultra HD "technology, on the other hand, is being driven by panel makers in mainstream markets by a multitude of vendors, with the China market taking the lead." Aaron Taylor is of the same mind, adding, "Chinese TV vendors HiSense, TCL, and Seiki, have all made a tremendous push on Ultra HD."
The Chinese brands, namely Seiki, came into the market and brought the price down much faster than Korean and Japanese manufacturers wanted. This forced everyone to drop their price to remain competitive. Where before the sets were running around $5,000, now from Samsung, LG, or Sony a 65-inch Ultra HD TV can be had for around $2,000. The Chinese are offering 65-inch Ultra HD TVs at around $1,500. That has helped consumers especially those in China embrace Ultra HD.
While the equipment manufacturers are building Ultra HD, is there any guarantee consumers will purchase them in the quantities needed to achieve the forecasted unit volumes?
A Strategy Analytics' ConsumerMetrix Service survey of 4,095 Europeans and 2,024 US consumers, found over 50% of those who participated said they would likely buy Ultra HD in the next two years. The survey also found that the intention to buy Ultra HDTV peaks in the 25 to 34 age group and the awareness of Ultra HD was greater among higher income consumers, two third of which express an intention to buy this next generation television.
The research suggests that TV manufacturers planning to produce large numbers of Ultra HD sets in 2014 should see strong product acceptance during the Christmas buying season. The only remaining question is what Ultra HD content will be available for consumers to view once they bring the sets home?