Nikkei Weekly

06-10-2003

All eyes on flat-panel TV markets Television sales projected to surge 60% by fiscal 2006 to whopping 300 billion yen.
Japanese flat-panel TV makers are stepping up sales at home and abroad at the same time that Dell Inc. of the U.S. plans to enter the liquid crystal display TV market.
Market entry by the world's largest personal computer maker is expected to create intense competition in an industry dominated by Japanese companies.

Victor Co. of Japan, known as JVC, plans a sales offensive for its LCD and plasma models. The company will introduce five flat-panel TV models during the end-of-the-year sales season in Japan and will begin selling projection TVs based on its proprietary technology in the U.S. by summer. Sales of TVs, including cathode-raytube sets, are projected to jump 60% from fiscal 2002 to 300 billion yen in fiscal 2006.
Soon to be launched in Japan are 17-, 23- and 32-inch LCD TVs and 42- and 50-inch plasma TVs. JVC currently sells a 26-inch LCD
model. The new products are due to hit U.S. and European markets later.

The new projection TV for sale in the U.S. uses a component called D-ILA (Direct Drive Image Light Amplifier), which features a high-density, reflective liquid crystal structure. The device is said to provide a superior combination of brightness, resolution, contrast and color for a big screen. The company claims that its 50- to 70-inch projection TVs consume less energy, offer higher resolution and are cheaper than plasma TVs.

The LCD components, which will be made at JVC's Yokohama plant, will be shipped to JVC Industrial de Mexico SA, where the projection TVs will be assembled for shipment to the U.S. The company said it will also consider selling the projection model in Japan and Europe.

Sanyo Electric Co. plans to begin selling LCD TVs and terrestrial digital TVs in the U.S. and Europe next April. It has already begun planning its product lines for the two export markets, and appears to be in discussions with major distribution firms regarding product-delivery contracts. Sanyo has also been taking a more aggressive stance toward LCD TVs since it decided to re-enter the market this fiscal year. Sanyo plans to produce LCD
TVs as well as CRT TVs for terrestrial digital broadcasts in North America for the market there.

It will offer LCD TVs ranging from 15-20 inches. The digital terrestrial TVs will be 28-36 inches. In Europe, Sanyo began by offering terrestrial digital TVs in September in Britain, where such broadcasting has already begun. It plans to begin sales of LCD TVs throughout Europe next April.

Meanwhile, Dell plans to roll out low-priced products in the U.S. under its own brand as early as this month. The company will sell LCD TVs under the Dell name, exploiting the unique sales and inventory-management techniques it established for its PC operations.
The U.S. company will also consider selling LCD TVs in Japan and other countries this year or next. Dell will initially release TVs with 17-inch LCD screens in the U.S. in late October or November. It will sell the products directly to consumers over the phone and the Internet to keep costs down. It plans to later roll out a 30-
inch model and also begin selling LCD TVs outside the U.S.
The company plans to procure LCD screens from South Korea and outsource assembly. Japanese companies, such as Sharp Corp., Matsushita Electric Industrial Co. and Sony Corp., have a large
presence in the LCD TV market, with a combined share exceeding 70% in 2002.

Japanese-made 17-inch LCD TVs are priced at around 100,000 yen, and U.S. retailers market their privatebrand models at about $600. It is unknown at what price Dell will market its 17-inch model, but an official said the company will offer a competitive price, possibly 30-40% cheaper than Japanese models. In 2002, global sales of LCD TVs totaled slightly more than 1.3 million units, about 50% of which were sold by Sharp.

South Korean firm Samsung Electronics Co. was No. 2 in the market.