While the current situation is changing fast, we have made the following assumptions underpinning the forecast. This should allow assessment of the forecast as events develop.
The effect is in two parts:
–Shortage of components in China caused by quarantine action
–Quarantines of consumers: unable to leave home, retailers closed.
–Reduced spending: lost earnings and loss of confidence
–Canceled sporting events (which drive the promotional calendar for TV sets)
The demand-related shock is much more impactful and will require adjustments throughout the supply chain. Shortages of some key components will be a temporary factor in some manufacturing regions, although the potential for factories in Europe, APAC (outside China) and Latin America to close temporarily will certainly be an additional risk factor to supply
As most of the dramatic actions have taken place in just the last 1-2 weeks, the TV Sets research team has made the following headline adjustments:
- Global TV demand forecast for 2020 has been reduced by 9.7%, from 225.5 million units to 203.5 million units
- Forecasted TV demand is reduced for both LCD TV as well as OLED TV
- The first half of 2020 demand is reduced by 17%, while the second half is reduced by 4%.
The principal assumption is that Covid-19/Coronavirus-related demand drops are largely confined to Q1-Q2 2020. With the expectation that consumers adjust to the new normal, and that government stimulus kicks in fully in the second half of the year, some demand recovery can be expected. Of course, additional downside risk exists, and recovery may be negatively impacted depending on the depth and length of the economic downturn, which is unknowable at this time.
Further interim re-issues of headline forecast shipments by region may be made to keep pace with a fast-changing situation.