Roku OS Big Winner in Rising Q1 Smart TV Adoption Fueled by Tariffs Fear, Says IHS
Higher Q1 consumer smart TV adoption was the “unintended consequence of the U.S.-China trade dispute,” with the Roku TV operating system the big winner, said IHS Markit Wednesday.
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Fears of higher Section 301 tariffs on Chinese TV imports "spurred TCL and other TV brands reliant on Chinese manufacturing to increase shipments to North America in early 2019,” said IHS. “These companies hoped to build safety stocks and generate as much sales volume as possible before pricing was impacted by the tariffs. This strategy boosted sales of Chinese-made smart TVs during the quarter.”
Chinese smart TVs “make extensive use of the Roku OS, in contrast to more established brand names, which often employ their own operating systems,” said IHS. “The boom in Chinese TV sales put Roku at the top of the North American market for the first time since the third quarter of 2017,” it said. “Roku outstripped Samsung’s Tizen and LG’s webOS because of the popularity of the low-priced Chinese smart TVs.”
IHS estimates the Roku OS had 37 percent share of the U.S. smart TV market Q1, up from 23 percent in Q4. Roku CEO Anthony Wood on a Q1 call said more than one in three smart TVs sold in the U.S. in the quarter were Roku TVs, and that “we have taken the lead from Samsung and are now the No. 1 smart TV OS in the country.”
U.S. TV imports from China under the 8528.72.64 tariff code increased 48.7 percent in Q1 to 5.07 million sets, said the International Trade Commission, which doesn’t delineate smart TVs from those without internet connectivity. The average customs value of a TV shipped from China in Q1 increased 1 percent from Q1 a year earlier to $200.50, said ITC.
Finished TVs shipped to the U.S. from China were removed from the 25 percent List 1 Section 301 tariffs that took effect July 6, 2018 (see 1806150030), but were restored to the threatened List 4 tariffs published mid-May (see 1905140025). President Donald Trump delayed putting List 4 into effect last month as the U.S. and China agreed to restart negotiations on a comprehensive trade package (see 1907010015).
China’s Foreign Affairs Ministry declined comment for days this week on reports that U.S. Trade Representative Robert Lighthizer will lead an American delegation to Shanghai next week for the first face-to-face trade talks with the Chinese since early May. Lighthizer’s office didn’t comment Thursday.