By Deepak Joseph

In CEA’s November 2010 5 Technology Trends to Watch publication I wrote a report about the future of video in a five-year horizon. In that report among many things, I outlined that we will see a reduction in the TV product replacement cycle driven by several key innovations and features on the TV platform. A trend postulated by other analysts’ years ago in general terms. However, now that we have come off the massive transition to Digital-TV and CEA’s 12^th Annual CE ownership and Market Potential Survey shows that since 2005, HDTV household ownership has tripled from 21 percent to 65 percent in 2010. The number of HDTV’s owned per household is also increasing and one in four households will purchase an HDTV in the next 12 months (71 percent will be repeat buyers). Consumers are also buying HDTVs as secondary sets. The average household now has 1.8 high-definition televisions, up from 1.5 a year ago.

Given this high initial purchase of HDTV, I wanted to dwell more on how, and if, consumers will effect a shorter TV replacement cycle in the five-year horizon where each household will already have multiple HDTVs. There is a push and pull aspect to this. The push comes from the OEMs by offering better products, features, lower price and more. The pull comes from consumers’ desire to purchase as an impulse buy, critical need or other factors.

The push side trajectory is getting clearer as the Digital TV platform is allowing OEMs to move beyond just screen fidelity (thinner, lighter, brighter etc.) and offer additional features and capabilities like built-in computing horsepower to playback of OTT content, Apps, video-calling communications and more.

It is the pull side of the equation that I wanted to explore more in this post. Currently the wireless handset replacement cycle averages an 18-24 month period, PC/Laptop replacement cycle is ~36 months and TV replacement is ~6-8 years. Will TV replacement cycles reach 3-4 years like laptops is something that will depend a lot on both push and pull factors. While there are several strong pull factors from the consumer end, I see one particular challenge offered by the sheer size of the TV. It seems to me that all things being equal it is easier to replace a laptop or handset than a TV. I can simply stow a laptop or phone in a drawer (I think I still have a phone from circa 1995 lying around somewhere) but stowing a 50 inch TV has challenges.

A shorter replacement cycle for TV also poses unique challenges to reverse logistics, waste management and the recycling industry in handling these large devices at three-year replacement, be it disposal, recycling or trashing. Challenges with disposing of large-screen HDTVs might hamper and prolong the replacement cycle for TVs. CEA’s September 2010 Report on CE Recycling and Reuse among many things shows 45 percent of consumers in the past 12 months disposed of their TVs in one of three ways – recycle, donate/give-away, and a majority of consumers have not disposed of their TVs. In order for consumers to give up their well functioning TV for a new better-featured TV (read as connected TV) the industry needs to make is easy for consumers to recycle their current TVs. Manufacturers and retailers have a big role to play in this, both by creating the right business models and establishing infrastructure for the exchange or disposal of big screen TVs. It remains to be seen if such models and infrastructure will arise to shrink the TV product replacement cycle.