Television has been a major part of most people’s lives in the 20-21st century, and its use has been a staple of modern life. Few can imagine their household without a television, and the invention of smart TVs has only expanded the scope of its possible application. Speaking from an economic standpoint, the television market has significantly expanded in the recent years, creating both a strong supply and a strong demand for the new products. The reason TV has been chosen as the topic for this essay is the availability of data regarding the growth of the television market. This paper will focus on describing the market for smart TV, the influences on its supply and demand, and the anticipated changes.
Supply and Demand
There are multiple factors influencing supply and demand for Smart TVs, both general and specific to this market. The main factors driving the demand are the advancements made in the technological field, rising disposable income of consumers, a relatively short lifespan of a TV, and a wide variety of available models in any price range (Smart TV Market, 2020). Newer models equipped with more advanced features are constantly being produced, making the option of buying a new product more appealing for customers. In particular, the 4k ultra HD segment of smart TVs is expected to grow notably, due to their high picture quality (Smart TV Market, 2019). The rise in the amount of disposable income makes buying a Smart TV more affordable for lower-income families. Furthermore, regular smart TV also usually has a lifespan of about 6-10 years, the purchase of another TV becomes a necessity if the old one is broken. In the near future, the global smart TV market is “anticipated to flourish at a compound annual growth rate (CAGR) of 8.5% over the forecast period i.e. 2017-2024.” (Smart TV Market, 2020), showing that smart TVs are in clear and rising demand with consumers.
Supply, on the other hand, is driven by technological advancements, high competition, the use of outsourcing, and the high cost of production. The major problem for the main competitors is the complexity and expensiveness of making a Smart TV. This problem is usually solved through outsourcing the production to make it cheaper. However, better technology can also make manufacturing more time-efficient and help reduce the cost, resulting in larger supply. Furthermore, according to the report on the Smart TV market: “industry leaders are making high investment in technology to improve the overall performance of smart TV. Such technological development is further attributed to drive the growth of global smart TV market.” (2020). Reports show that new technology also helps to better the product quality.
Effect on Equilibrium Price and the Future of Smart TV Market
The Smart TV market has shown steady growth this decade and its equilibrium price has been affected. Due to both supply and demand growing proportionally, the equilibrium price keeps getting higher. According to statistical predictions, the global market for smart TVs will increase in the following 5 years even further. In their industry report, Mordor Intelligences state, “The smart TV market is expected to register a CAGR of 16.52” (2019). They also mention that smart TV offers unified internet access, offering connectivity and advanced computation (Smart TV Market, 2019). Fast development of the industry is primarily driven by the main competitors of the industry expanding the market and by the technological advancements both making the production easier and raising the standards for smart TV functionality higher. Another important factor to consider is the geographical spread of the television market. Currently, the Asia-Pacific region is dominant in the growth of the industry, with India, China and south Korea being a major influence (Smart TV Market, 2019). The market in this region is predicted to expand even more in the next 5 years, largely being attributed to increasing disposable income of consumers and the fast-growing economy (Smart TV Market, 2019). Given such a development strategy, the TV industry is likely to expand and accumulate profits even further in the coming years.
Conclusion
With the rise of modern electronics and smart technology, smart TVs have seen an unprecedented increase in popularity with consumers. Replacing the old, standard televisions, smart TVs seek to combine the advantages of internet connectivity with the functionality of a regular TV, offering various ways to enrich the viewing experience. Their multi-functional nature and constant implementation of new features help them to stay relevant despite the prevalence of the internet and personal computers. The main factor influencing both supply and demand is technological innovation, helping in the manufacturing process and setting the standard for each new product. The rapid increase in both supply and demand, the equilibrium price of a Smart TV is rising. Fierce competition and declining prices due to the increasing number of competitors drive the demand for smart TV’s even further (Smart TV Market, 2017). The industry is expected to see a steady increase in revenue over the next few years.
References
- Smart TV Market: Global Demand Analysis & Opportunity Outlook 2024. (2020). Research Nester. Web.
- Smart TV Market: Growth, Trends, and Forecast (2020 – 2025). (2019). Mordor Intelligence. Web.
- Smart TV Market Size & Share, Growth: Industry Trends Report, 2025. (2017). Grand View Research. Web.