Plasma TVs: Market Decline Thread - AVS Forum | Home Theater Discussions And Reviews
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This thread is intended to track the condition of the Plasma display device market. As per forum rules, no prices from any particular sales outlet will be posted. Rather, news from relevant industry sources on the topics listed below will be collected in a timely manner:
▪ MSRP and ASP (Average Selling Price) news, trends
▪ Market analysis & projections
▪ Fab and production news
Other threads in this group on the AVS Forum:
LCD TVs: Fab News Thread
LCD TVs: Market Price Stats Thread
LCD TVs: Technology Advancements Thread

OLED TVs: Technology Advancements Thread
TDEL TVs: Technology Advancements Thread --------------------------------------

LCD overtakes plasma in 37-inch TV segment; now to the 42-inch segment
18 August 2005



Increasing LCD market share: 37-inch LCD versus 37-inch PDP,
July 2004-June 2005. Source: PMA, compiled by DigiTimes, Aug 2005.


For the first time, LCD TVs captured 51% share of the 37-inch market segment that includes HD (high-definition) PDP (plasma display panel) TV and ED (enhanced definition) PDP TV products in May 2005, according to Pacific Media Associates (PMA).

May was not a fluke, as LCD increased its share in the 37-inch segment in June 2005, taking 57% of the segment. The increases in market share have been driven by a drop in average street prices of 37- inch LCD TVs, placing these products on a virtually equal price footing with 37-inch HD PDP products.

Average prices for 37-inch LCD TVs hit a low of US$3,126 in June 2005, a decline of about 25% from March 2005 when the ASP (average selling prices) was US$4,138. The ASP for 37-inch HD PDPs in June 2005 was U$2,963.

Contrary to popular thinking, LCDs cannot support a price premium over similarly-sized PDPs, said Rosemary Abowd, PMA Vice President and director of PMA research on flat panel displays and rear projection. While LCD prices hovered above PDP prices, the market preferred the plasma models. As soon as the price for LCD models matched PDP prices, LCDs captured a significant portion of the segment, Abowd explained.

It is likely that you will see few 37-inch PDP products on the market during the 2005 holiday season. Some PDP manufacturers are abandoning the segment, opting to concentrate on 42-inch PDP TVs, which are just as efficient to produce and carry a higher price, Abowd added.

Which technology will win the race? LCD TVs have replaced PDP TVs in the 32-inch segment and are on their way to doing the same in the 37-inch segment. This should make market watchers and plasma manufacturers worry that the 42-ich segment is also vulnerable. Once LCD fabrication facilities in Asia reach full capacity and can produce 42-inch glass panels considerably more cheaply and in much greater quantity than today, PMA expect a huge battle between LCD and plasma.

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Newswatch: CPT phases out PDP production
19 January 2006

Chunghwa Picture Tubes (CPT) has halted production of plasma display panels (PDP), according to the company’s spokesman Jiun-yi Wu, as cited by the Chinese-language Economic Daily News. The news comes less than a week after the only other Taiwan-based PDP maker, Formosa Plasma Display Corporation (FPDC), announced its decision to dissolve the company.

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Study: LCD Takes PDP In Q4 Share
26 February 2006

AUSTIN, TEXAS — Quarter-to-quarter global sales revenue for LCD TVs surpassed that of plasma TVs for the first time in fourth quarter of 2006 following strong sales in the 40-inch to 46-inch screen size segment, according to a report just released from market research firm DisplaySearch.

Meanwhile, Sony took top revenue spots in worldwide LCD TV sales, while Samsung took top unit sales market share for the category. Samsung was also the top unit sales and revenue earner in overall television sales, worldwide, during the fourth quarter, the report states.

In other categories, Panasonic was the dominant brand in global plasma TV unit sales and revenue during the period, and Sony took the top microdisplay rear-projection TV brand share honors for units and revenue, worldwide, in the fourth quarter.

DisplaySearch's fourth-quarter 2006 TV shipment report and forecast tracked 53 different TV brands.

According to the report, overall global TV unit shipments grew 26 percent quarter-to-quarter (Q3 to Q4) in the seasonally strong fourth quarter while declining 1 percent year-to-year (Q4 2005 to Q42006) to 57.6 million, Display Search said. North America registered the highest year-over-year (full year 2005 over full year 2006) overall TV unit growth, which DisplaySearch attributed to "excessive sell-in during the third quarter leading to rapid price declines in large-sized flat -panel TVs."

According to the report, LCD TV was the only technology to enjoy year-over-year revenue growth worldwide in the period, up 72 percent, as 117 percent LCD unit growth offset the 21 percent average selling price declines.

LCD TV shipments reached a record high 18.6 million units, worldwide, and a 32 percent share of the overall television market in the fourth quarter of 2006, DisplaySearch said. For the year, LCD TVs rose 119 percent to 46.4 million units and a 24 percent share, up from 11 percent in 2005. On a revenue basis, LCD TVs led with a 49 percent share, up from 32 percent in 2005.

The report said that LCD TV revenue surpassed CRT TV revenue in North America for the first time in the fourth quarter.

LCD TVs rose from 4 percent unit share worldwide in the third quarter of 2006 to 7 percent unit share in fourth quarter of 2006, earning a 9 percent share in North America. Also, worldwide 1,080p LCD TV sales overtook 720p LCD TVs on a unit basis in the 46-inch to 47-inch segment in the period and reached a 30 percent revenue share at 40-inch to 44-inches.

Sony widened its revenue share advantage over Samsung in the 40-inch to 44-inch segment worldwide, DisplaySearch said, by accounting for more than a 50 percent share in 40-inch to 42-inch 1,080p models. While Samsung fell to No. 2 in LCD TV revenues, Sharp, Philips and LGE remained Nos. 3 -5 with only Philips gaining share.

For the year, Sony led in worldwide LCD TV revenues for the first time with a 16 percent share followed by Samsung at 15 percent and Sharp at 11.5 percent.

"2006 was the first year Sharp had not been No. 1 in LCD TV revenues," DisplaySearch said.

On a global LCD TV unit basis in the quarter, Samsung ranked No. 1 with a 14 percent share followed by Philips at 13 percent, Sony at 12 percent, Sharp at 10 percent and LGE at 7 percent, DisplaySearch said.

For the year, Samsung led with a 13.4 percent share followed by Philips at 13.0 percent, Sony at 11.6 percent, Sharp at 11.3 percent and LGE at 7 percent.

In the plasma TV segments, DisplaySearch said worldwide revenues were up 7 percent in the fourth quarter over the prior quarter, but fell 4 percent over the same period last year to $5 billion. It marked the first quarter that plasma TV revenues have declined year to year. The result was attributed to a loss of share to LCDs in the 40-inch to 44-inch segment and rapid price erosion, DisplaySearch said.

However, plasma over took microdisplay rear projection TVs for the first in the 50W-inch plus segment in the fourth quarter of 2006 with a 42.5 percent to 42.3 percent advantage.

In the 50-inch to 54-inch segment plasma held 55 percent share, up 34 percent from the third quarter and up 35 percent from the fourth quarter of 2005 at 3.1 million units, worldwide. Share of the 50-inch-plus segment grew total plasma TV shipments from 13 percent in the fourth quarter of 2005 to 23 percent in the fourth quarter of 2006. However, the growth was insufficient to offset the aggressive price declines, DisplaySearch said.

The average selling price for a plasma TV fell 20 percent from the third quarter and 29 percent from the same period last year, to $1,643.

For the year, plasma TV shipments rose 57 percent to 9.2 million units worldwide, while plasma TV revenues grew 22 percent to $18.5 billion on a 22 percent decline in average selling price. In fourth quarter, 60-inch plus plasma TVs had the highest year to year growth on strong North American demand.

North America remained the top region for plasma sales with a 38 percent share and accounted for 63 percent of all plasma TV shipments in the 50-inch plus segment.

DisplaySearch said that on a worldwide basis, "Panasonic remained the dominant brand in Q4'06 with a 32 percent unit and 33 percent revenue share. On both unit and revenue shares, LGE remained No. 2 followed by Samsung, Philips, Hitachi and Pioneer. For the year, Panasonic led with a 29 percent revenue share followed by LGE at 16 percent, Samsung at 14 percent, Philips at 10 percent, Hitachi at 8 percent and Pioneer at 7 percent."

In microdisplay rear projection, unit shipments rose 17 percent quarter to quarter, while falling 9 percent year to year to 862,000 units, world wide, in the quarter. Share of the 55-inch-plus market rose from 70 percent in the third quarter of 2006 to 77 percent in the fourth quarter. For the year, microdisplays were up 13 percent year-to-year at 2.8 million units, world wide.

Over the year, microdisplay global revenues declined 34 percent year-to-year as the average selling price dipped 28 percent to $1,757, "despite a shift in size and resolution towards larger sizes and 1,080p resolution," DisplaySearch said.

For the year, microdisplay revenues were down 7 percent on an 18 percent decline in average selling price.

In the fourth quarter, 59 percent of microdisplay revenues were in 1,080p, compared with 25 percent in the year-ago period and 58 percent of MD RPTV revenues were in the 55-inch plus screen sizes, compared with 41 percent a year earlier.

By technology, DLP continued to lead in both global unit and revenue share and held a 43 percent share for the year. LCoS matched 3LCD revenue share in the fourth quarter as 3LCD unit shipments fell 34 percent year-to-year.

North America continued to dominate the MD RPTV market earning an 89 percent revenue share.

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DisplaySearch: PDP shipments decline for first time
2 May 2006

After a record fourth quarter 2005, PDP (plasma display panel) module shipments experienced their first sequential decline, according to DisplaySearch.

Shipments were down 11% sequentially, while rising 88% on year to 2.3M units. With supply tight and larger sizes and higher resolutions gaining share, average prices fell just 1% sequentially and 13% on year to US$796, the slowest decline to date.

As a result, PDP module revenues fell 12% on quarter while rising 64% on year to US$1.9 billion.

The sequential decline can be attributed to traditional seasonal weakness, new product transitions, factory shutdowns at the beginning of the New Year and factory conversions to larger and/or thinner glass substrates. The sequential decline was not a surprise to DisplaySearch as a 10% decline was projected despite PDP module suppliers expecting a 4% increase. Unlike the past five years where PDP module growth was at least 96%, PDP module growth is expected to slow to 54% making 2006 more vulnerable to seasonal declines.

Looking forward, PDP module suppliers are expecting shipments to rebound in the second quarter, rising 11% from the first quarter and 87% from the same period last year, as new products are launched and brands look to take advantage of World Cup-inspired large screen TV demand. PDP module production outpaced shipments in the first quarter, which will lead to robust shipments in April. Given that the actual results were within 1% of DisplaySearch's forecast, DisplaySearch does not expect any significant changes to its annual PDP forecast of 11.0 million panels.

Another important PDP development in the first quarter was that 42-43-inch high definition (HD) panels overtook 42-inch enhanced definition (ED) panels for the first time. While HD panels had a 40% share of the 42-430-inch market in the fourth quarter of last year, its share surged to 55% in the first quarter, growing 17% sequentially.

The growth was due to continued share gains for HD PDPs in North America and Europe where demand for HD compatibility is rising. Also, in Europe, second tier brands in which emphasize 42-inch ED were weak in the market. There was also slow growth in China and other developing regions where the ED share is high. Further reductions in the HD-ED price gap and higher margins at HD vs. ED for both brands and retailers were other contributing factors to the growth of HD.

Looking at all sizes and resolutions, the HD share jumped from 51% to 64%.

In terms of size trends, 50-inch modules earned their highest share to date at 14%, up from 11% in the fourth quarter of last year, as 50-inch PDP TVs become increasingly affordable. 50-inch panel prices were down 27% on year in April with 50-inch PDP TV prices falling 40% to under US$3500.

Another first in Q1'06 was that LGE led the PDP module market for the first time, which also was expected, overtaking Matsu****a which fell to number two and Samsung SDI which fell to number three. LGE was one of only two suppliers to enjoy sequential growth in the first quarter, and its growth of 9% on quarter to 730K units helped it gain a 31% share of the market. LGE was the top producer of 42-inch ED and 50-inch while FHP was number one in the 42-43-inch HD. Matsu****a was number two at 50-inch while Samsung SDI was number two at 42-inch ED and 42-43-inch HD. In terms of HD panel rankings, LGE edged Matsu****a followed by FHP and then Samsung SDI. While LGE led in TV panels, Pioneer led in Public Displays with a 31% share.

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LCD closing price gaps with PDP in the 40-inch range, says TSR
23 June 2006

Prices of 40-inch WXGA LCD panels are now nearly at the same level as that of 42-inch 720p PDP (plasma display panel), according to Japan-based research firm Techno Systems Research (TSR).

Prices of 40-inch LCD panels were US$850 while 42-inch PDPs were priced at US$720 in the first quarter of 2006, compared to a price gap of more than US$100 between the two before 2005. Prices for 40-inch LCD panels will drop to US$750 in the second quarter of 2006, compared to US$690 for 42-inch PDPs, the research firm said.

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Plasma's Bad Quarter - Good News For LCD
24 July 2006

Simon Lewis submits: This morning's release from DisplaySearch on Q2 plasma shipments showed a mere 3% quarter-on-quarter growth in Q2 after a first ever quarterly decline in the era of mass production plasma the previous quarter. The only truly good news in the data for the plasma industry was Matsu****a (MC) which registered volume growth of 30.9%, while Samsung SDI held its ground.

Read the data closely and the LCD industry, especially Samsung, Sony and Sharp can be greatly encouraged. Plasma is shifting its emphasis out of the 42-43" category towards the 50" market. 50" share rose from 14% to 18% and is expected to increase further to 21% in the current quarter. In other words, despite its optimism that volumes will grow by one-third in the current quarter, the plasma community is recognizing that its traditional advantage over LCD in the 42" class is being all but eliminated.

It's a battle of performance now, not a battle of prices. And with LCD offering full 1080p HD here, and a small and ever-shrinking price premium, plasma needs a new mass market, otherwise volume stagnation will continue and the new plasma manufacturing capacity will sit idle.

More consumers than ever will be buying a 40-something inch TV in the coming holiday season. It's beginning to look like the LCD industry will have cause to celebrate in this segment.

How will LG Electronics, the #2 manufacturer of plasma panels and largest shareholder in LG.Philips LCD (LPL) react? Managing the transition from plasma dominance to LCD dominance in this segment is commercially and culturally challenging.

And what about Philips (PHG), an opportunistic player in both plasma and LCD end markets? These two CE brands will largely seal the fate of LPL. If they purchase large numbers of 42" LCD panels, then LPL's Gen 7.5 fab will do good business. And if not, LPL is likely to be sitting on even larger 42" inventories at the end of this quarter.

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Sony quits plasma market for reals
4 August 2006

Yeah, Sony's been threatening to do it for years, and haven't been putting out plasmas in the US since 2005, but Sony finally is getting serious about quitting the low-profit (for them, at least) world of plasma -- and it would appear they've finally done it. Sony has been seeing a sharp decline in shipments, from 300,000 in 2004 to 100,000 in 2005, and profits have been slim due to the lack of their own plasma display factory; they plan to increase LCD shipments to pick up the slack, and hope to increase their shipment ratio of 40-inch plus LCDs by 50% before year's end. They've also contracted construction on an eighth-generation LCD plant, which should start production in fall 2007, and handle 50,000 glass substrates a month. Sony hopes to boost LCD sales 33% in 2007 to a whopping eight million units, and if it means bigger displays and lower prices we sure won't be complaining.

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LCD TV to overtake PDP TV in 40-inch-range TV market by year-end
18 August 2006

The combined shares of 40- and 42-inch LCD TVs will exceed that for PDP (plasma display panel) TVs in the global 40- to 49-inch TV market by the fourth quarter of this year, according to Hsiung Hui, executive vice president of AU Optronics (AUO).

In the 40-inch-rage TV market, LCD TV gained ten percentage points to account for 32% of the market in the second quarter while PDP TV saw a five-percentage-point drop to 60% last quarter, according to DisplaySearch.

Price reduction is the driver for the change in the TV market. Prices for a 42-inch PDP TV used to be US$50 more expensive than that for a 40-inch LCD TV in June but became US$31 cheaper than that for a 40-inch LCD TV in July, WitsView Technology pointed out.

TV panel prices will also continue to drop, DisplaySearch said. The ASP (average selling price) for a 42-inch LCD TV panel is expected to drop 6-9% to US$680-700 in September sequentially, which is at a similar price level to that of a 42-inch HD (high-definition) PDP in August, the research firm added.

To stay competitive, PDP TV makers are moving their focus to the 50-inch PDP TV market. In the second quarter, the fast falling prices helped 50-inch PDP TV grew 40% sequentially in sales in the US market. The 50- to -59-inch range accounted for 35% of the total PDP TVs shipped in the US during the second quarter 2006, up from 30% in the first quarter, a report from Quixel Research showed.

In related news, thanks to better sales in the US market, Panasonic grabbed the top position and left LG Electronics (LGE) in the second in the global 40- to 44-inch PDP TV market with 23% of market share during the second quarter, according to DisplaySearch.

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LCD cheaper than PDP in 40-44-inch HDTV market in N. America
22 September 2006

The average street prices for 40-44-inch LCD TVs and business displays in North America dropped below those for high-definition (HD) plasma panel display (PDP) TVs of the same size range for the first time in July, according to research firm Pacific Media Associates (PMA).

Not long ago, this size range was dominated by PDP TVs because LCD models cost much more in the range. As LCDs now cost less on average, their share of sales is growing rapidly. In July, LCDs in this size range gained four percentage points to 46% of the market. This trend is likely to continue, pushing PDP TV to dominate the 50-inch range flat-panel TV market.

"We've seen this repeatedly in the past," according to Rosemary Abowd, vice president of PMA. "When the price of LCDs match or drop below the prices for HD PDP TV of the same size, LCDs win, Abowd said, adding that PMA expect LCDs will account for the majority of unit sales in the 40- to 44-inch range TV market soon.

Across all flat-panel TVs of 30 inches or larger, LCDs gained another three percentage points to 57% of the market in July.

Unit sales for flat-panel TVs were down 10% sequentially in July, which is similar to the summer slowdown seen in previous years. However, the segment had a 67% on year increase. Sales are expected to increase again, as the football season and holiday buying season arrive.

Competition for the top spot in unit sales is heated; Sony's 20.3% share was just one percentage point ahead of the second place claimed by Panasonic, and Samsung was a close third. The Pioneer PRO-1130HD 50-inch HD PDP TV remained the top on the best-seller list for the second month in a row, PMA stated.

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LCDs Pushing Plasmas to Sidelines of Flat Panel Market
9 October 2006

Carl Howe (Blackfriars Communications) submits: Last year I wrote an article talking about the rapid decline of plasma flat panel prices as we entered the second half of the year and started approaching the Christmas shopping season. At that time, I noted that name-brand 50-inch plasma panels had broken the $3,000 barrier and that we might see non-name-brand sub-$1,000 42-inch plasmas around Black Friday.

Well, a similar situation is brewing this year. As I write this, I note that as I look at best flat panel prices, I'm starting to see 50-inch panels such as the Panasonic TH-50PX60U approaching the $2,000 mark before shipping (current best price with shipping is about $2,300 -- these are big boxes we're talking about). 42-inch plasmas such as the popular Panasonic TH-42PX60U are now sub $1,500.

Now we could simply chalk this up to normal 30% per year price declines in flat panels, but I think there is more going on here. Overall, most video aficionados believe that the best plasmas today are pretty convinced that plasmas still generate the best HDTV pictures in home theater environments. And most of the new capacity being added nowadays is LCD, not plasma, so plasma pricing should be holding up better than it is.

But there's also an interesting marketing war going on between plasma and LCD technologies. The LCD guys, especially Sony and Westinghouse, are touting the theater-definition 1080P resolution as their big differentiator, despite the fact that there really aren't any 1080p content sources readily available yet. In the process, they are painting plasma technology as "old and staid." In fact, there was even an Opus Sunday cartoon a few weeks ago where a conservative character Steve notes that he is "staying the course" in upgrading to plasma, implying that that was the choice of people who really didn't want change.

This is a race to the bottom on product margins, which eventually will drive some companies out of business. The winners in this war will be not only those who make the best technology, but those who do the best job of marketing real consumer benefits that will command better margin products. Pioneer has done a pretty good job of doing that in the current plasma war, and Sony is similarly pushing premium consumer value with details like color-coordinated bezels with their XBR2 and XBR3 series LCDs. But this war is going to create a lot of casualties in the second and third tier manufacturers trying to break into the market.

All that said, the high ticket prices for flat panels promise to keep the holidays bright for companies like Best Buy and Circuit City. Amazingly, flat panels and iPods have actually been raising average revenues for consumer electronics purchases the last few years, despite the ever-declining prices of most categories. But there's still a lot of room for innovation toward iPod-like excitement around HDTV with consumers by marketing style, simplicity, and quality. Meanwhile, we predict that $1,000 to $3,000 flat-panels will be the Tickle-Me-Elmo product hits for adults this holiday season.

Update: No sooner did I write about the flat-panel TV plasma pricing precipice, part II, than Circuit City advertised on Sunday that it would sell a variety of off-brand 50-inch plasma panels for $1899 at its stores this weekend. It's feeling like plasma panel prices will fall nearly 30% again this year. Kind of amazing, since they did that last year as well.

Remember that the PC marketing really got going when PCs fell below $1,000. Don't be surprised to see much more large scale consumer adoption as HDTV 42-inch panels fall below that magical pricing point as well. When will we see that happen? I'm sure we'll see some isolated sale prices in that range next month on Black Friday (November 24th this year, the Friday after Thanksgiving here in the US). But I predict that 2007 will be the year of that price becoming routine at US retailers.

Of course, for those really wanting to go flat for less than $1,000 now, there are always EDTV panels, which are already in that vicinity. But no matter whether its EDTV or HDTV, the future of TV looks flat.

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LCD to beat PDP in 40-inch-and-larger panels in 4Q, DisplaySearch says
31 October 2006

LCD TV panel shipments were larger than PDP shipments at the 37-inch-and-above segment for the first time in the third quarter of 2006 and are poised to overtake PDPs at the 40-inch-and-larger segment as early as the fourth quarter, according to research firm DisplaySearch.

Shipments for 40- to 47-inch LCD TV panels have risen 560% sequentially to 2.4 million units, taking significant share from PDPs as 720p prices approach parity while 1080p LCDs offer increased differentiation. Supporting LCDs is massive growth in 40-inch-and-larger optimized capacity with seventh-generation (7G)-and-above capacity and a number of major brands shifting their 42inch emphasis from PDP to LCD.

PDP (plasma display panel) shipments rose 17% sequentially and 47% on year in the third quarter of 2006 to a record 2.8 million units, according to DisplaySearch. PDP revenues also earned a record high in the third-quarter, rising 10% sequentially and 29% on year to US$2.02 billion, the first time that PDP revenues exceeded US$2 billion, the research firm added.

However, PDP average selling prices (ASPs) were down 6% sequentially and 12% on year to US$724, DisplaySearch indicated.

Despite the record results and seemingly healthy growth, the third-quarter growth was significantly slower than any other quarter to date with on-year growth over the past 12 quarters ranging between 73% and 170%, according to the research firm. PDP suppliers are expecting even slower growth in the fourth quarter, up 20% on year to 3.2 million units. Assuming PDP suppliers hit their fourth-quarter targets, PDP shipments will rise 49% on year in 2006 to 10.7 million units, which is less than half the growth of previous years.

There are a number of reasons for the slower growth in shipments. Migration to larger sizes is reducing the number of panels that can be produced per substrate. The share of the 50-inch-and-larger segment of worldwide PDP shipments has doubled from 12% in the third quarter of 2005 to 24% in the third quarter this year. Capacity growth will be just 46% in 2006, compared with 92% in 2004 and 66% in 2005. The slower capacity growth has resulted in tighter supply, which in turn has reduced pricing pressure and impacted demand. Increased competition from LCD TVs below 50-inch has also contributed to the slower PDP growth.

High-definition TV (HDTV) formats continued to drive PDP shipments, with the HD share rising from 73% in the second quarter to 79% in the third quarter on a 28% growth. The share is expected to reach 86% in the fourth quarter on a 23% growth.

Shipments of 1080p PDPs also surged in the third quarter, rising 183% sequentially to 21,000 units. In the fourth quarter, 1080p panels are expected to rise 78% to 38,000 units.

By supplier, LG Electronics (LGE) led on a unit basis on 27% growth to overtake Matsu****a. On the other hand, Matsu****a led on a revenue basis for the third time over the last four quarters due to its emphasis on higher resolutions.

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Trick or Treat-LCD is on PDP’s Doorstep
31 October 2006

The long-awaited nightmare of PDP managers has arrived - and it was announced on Halloween. DisplaySearch said today that for the first time, LCD-TV panel shipments exceeded PDP shipments in the 37-inch-and-above segment in Q3?06.

Not that PDP had a bad Q3, mind you. 2.8M units shipped and revenue was at a record high, up 10% sequentially and almost 30% year-on-year, passing the $2B mark for the first time ever, according to DisplaySearch. But all this wasn’t enough to stop the LCD juggernaut fueled by super capacity Gen 7, Gen 7.5 and Gen 8 fabs pumping out large displays in unprecedented quantities that kept the price pressure in high-gear over the quarter and pumped up flat panel demand across the industry.

In fact, the double-digit (17%) sequential growth numbers in PDP sales look anemic by comparison to large LCD panels, which topped the mid-triple digits at a whopping 560% sequential growth in the 40- to 47-inch panel size.

Scratch the surface a bit and you’ll find the devil in the details. While revenue is up, PDP’s unit growth is actually slowing, partly because of the shift toward production of larger (+50-inch) panels. This defensive move is in answer to rival LCD’s 1080p, full-HD push and helps explain LCDs success in the +37-inch category, where PDPs cannot compete on pixel (cell) density.

For PDP makers, the trade-off to building larger panels is reduced unit output as fewer larger panels can be produced per plasma substrate. This is reflected in the Q3 numbers. Third-quarter PDP unit growth was actually the lowest in the past 12 quarters, which saw sequential growth range between 70 to 170%.

It makes sense. Larger PDP panels are selling for more, but in lower quantities. In fact, +50 inch PDP panel output doubled in the past year from 12% to 24%. But unlike LCDs, which are being made in record numbers, PDP’s shift to larger panel sizes has resulted in reduced PDP output, which, in turn, lowered supply pressure on prices. What was a PDP price gap with LCD is narrowing. As prices for large LCD panels dropped to relative parity with PDP in the same size range, consumers opted for the higher-resolution LCD models, in part stimulated by the mantra of “full-HD.”

Here’s our take: Matsu****a, LGE and Samsung SDI have invested heavily in ramping production to compete with LCD in the large-display space. Plasma “owned” the large flat-panel market for many years, but it did this without effective competition. Remember, plasma had no flat-panel competition until the recent development of Gen 6 LCD fabs.

So, adding insult to injury, the display gods picked Halloween as the last day LCD could claim to king of the big-display hill in the 40-to-49-inch segment. Is this as frightening to PDP planners as a cackling witch on Halloween? Actually, no. People in the industry have seen this coming for months, and PDP demand is projected to grow for years to come. But if anyone is just a little nervous, they, like tonight’s Halloween pranksters, will be able to take off their costumes and masks by tomorrow, and the event will fade with few real consequences on their - or our - daily lives.

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Plasma panel growth slowed in Q3, firm says
31 October 2006

SAN FRANCISCO — Third quarter plasma panel shipments increased 17 percent sequentially and 47 percent year-to-year, reaching a record 2.8 million units, according to market research firm DisplaySearch Inc., which noted that growth was slower than previous quarters.
Plasma panel revenues also topped $2 billion for the first time in the third quarter, reaching $2.02 billion, up 10 percent sequentially and 29 percent year-to-year, DisplaySearch (Austin, Texas) said. The average selling price of a plasma panel dipped to $724, down 6 percent sequentially and 12 percent year-to-year, the firm said.

DisplaySearch noted that third quarter plasma panel growth was slower than any of the past 12 quarters, which had ranged from 73 to 170 percent year-to-year. Plasma panel suppliers are expecting even slower growth in the fourth quarter, DisplaySearch said, forecasting 3.2 million units, which would be up 20 percent year-to-year. Assuming plasma panel suppliers hit their fourth quarter targets, 2006 panel shipments will rise 49 percent in 2006 to 10.7 million units, less than half the growth of previous years, the firm said.

DisplaySearch attributed the slowing growth to closer capacity growth, migration to large panel sizes, tighter supply and increased competition from LCD TVs.

LG Electronics Inc.'s plasma panel unit shipments increased 27 percent sequentially in the third quarter, enabling it to overtake Matsu****a Electric Industrial Co. Ltd. for the lead in units, DisplaySearch said. LG was the only supplier to gain market share and assumed the No. 1 position for the second time in three quarters, DisplaySearch said.

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Display Daily: Plasma’s Shrinking Base
10 November 2006

The flat-panel television (FP-TV) market has been undergoing dramatic transformation, which is now coming to light in recently released market- research findings for 3Q’06. These figures show that LCD-TV will replace not only CRT televisions of under 40 inches but may also overtake plasma shipments of 40-50 inches in diagonal.

Insight Media AnalystIn 3Q’06, LCD-TV comprised almost one quarter (24%) of televisions shipped worldwide, up from 22% in 2Q’06, according to DisplaySearch. The number of units shipped increased by 99% from the same quarter last year.

The average LCD-TV size is also growing. The average LCD-TV diagonal stood at 29 inches in the third quarter. The 15% increase in LCD-TV average size offset price declines, allowing LCD-TV revenues to increase by almost as much (84%) as shipment growth over the same period last year. LCD-TV’s 3Q’06 revenues were $11.9B, representing almost 50% of the global television market.

DisplaySearch reported that LCD-TV shipments even surpassed those of CRTs for the first time in Europe. A report from LCD-TV panel manufacturer LG.Philips LCD also forecasts that worldwide LCD-TV revenues will also overtake those of CRTs for the first time in 2006.

The plasma-television industry has been responding with price reductions that matched shipment increases in 3Q’06. PDP-TV average selling prices were down 18% while revenues were up 18% versus the same period last year.

PDP-TV manufacturers have increasingly had to rely on a single region - North America - to maintain dominance in key segments. As PDP-TV becomes a low-cost, big-screen technology, North American buyers, who typically respond to low prices for larger diagonals, have begun to lead the world in plasma consumption.

However, only North America saw an increase in 3Q’06 plasma shipments over 2Q’06. Since North America was the only region with a sequential unit increase, it accounted for the entire 4% global increase in PDP-TV quarterly shipments. Moreover, 70% of plasma shipments in 50+ sizes were to the North American market.

The reason for this switch from plasma in regions outside North America, according to DisplaySearch, is the increasing competitiveness of 37-46-inch LCD-TV. LCD-TV shipments of 37 inches and larger overtook those of PDP-TV in most regions for the first time in 3Q’06.

DisplaySearch predicts that the 38% sequential increase in plasma shipments to North America will result in exploding channel inventory levels and drastically reduced prices during the 2006 holiday shopping season. Two weeks from today, on Black Friday, expect prices at North American retailers to fall below $1000 and $2000 for many 42- and 50-inch PDP-TV models, respectively.

Because falling plasma prices in one region are a result of incursions by LCD-TV worldwide, the bump in plasma demand is not expected to last. Plasma manufacturers will increasingly rely on larger sizes to maintain share. The only problem with this strategy is that the very largest televisions are the domain of MDTVs, which have absolute pricing advantages at 60+ sizes. Advances by LCD-TVs into plasma’s mainstream 40-49? segment is pushing PDP-TV manufacturers onto a precariously narrow base.

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Material costs for LCD lower than PDP in 40-inch class panels in 4Q, Displaybank says
16 November 2006







Material costs for 40-inch class LCD panels have fallen below than that for PDP (plasma display panels) of the same class in the fourth quarter of 2006, according to the latest report from Displaybank.

Total material costs for 40-inch class LCD panels has dropped to US$617 in the fourth quarter, down nearly 30% from US$874 during the same period in 2005. Cost for PDPs at the same size fell to US$631 this quarter, down 21% from cost of US$800 in the fourth quarter of 2005, Displaybank said.

Although both LCD and PDP makers are striving for lowering production costs, prices for major component for LCD panels such as glass substrate, backlight units (BLUs) are falling faster than those for PDP, the research firm explained.

In addition, shipments of 40-inch range LCD panels are catching up with rival PDPs, according to panel makers. In September, shipments for 40-inch class PDPs totaled 1.07 million units, with shipments from Matsu****a Electric Industrial and LG Electronics (LGE) at about 370,000 units and 350,000 units, respectively. Samsung SDI only shipped about 230,000 units in September amid slow expansion, the makers added.

Total 40-inch class panel shipments from LCD panel makers totaled about 1.06 million units during September, with monthly shipments of 40- and 46-inch segments from Samsung Electronics reaching 600,000 units, said panel makers. As panel makers such as Samsung are continue expanding their capacity in October, shipments of LCD TV panels in the 40-inch class are likely to exceed that from PDPs, LCD panel makers estimated.

As LCD technology is moving to larger-sizes TV market, PDP makers plan to push the 50-inch range segments or even 60-inch range to counter the rival LCD technology, according to PDP TV makers. DisplaySearch earlier also indicated that the 50-inch range TVs will become the new divide between the LCD and PDP TV segments, as opposed to the previous divide at the 40-inch mark, since LCD panel makers are accelerating their deployment at next-generation fabs .

In July, the average street prices for 40-44-inch LCD TVs and business displays in North America dropped below those for high-definition (HD) PDP TVs of the same size range for the first time, Pacific Media Associates (PMA) said in September.

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Shift to finer, larger TVs favors LCD over plasma
27 November 2006

Plasma TV suppliers such as Panasonic maker Matsu****a Electric, already outnumbered by the rival LCD camp, are expected to lose further ground as LCD TVs encroach on the 40-inch-class market, a plasma stronghold.

Growing demand for higher-resolution models is also giving a leg up to liquid crystal display (LCD) TVs, promoted by Sony Corp. and many others in Taiwan and South Korea, paving the way for consolidation among plasma companies, analysts say.

It is technologically difficult and often costly for plasma makers to give a full high-definition function to models with a screen size of less than 50 inches, while LCD TV makers are aggressively promoting full HD models in that segment although prices are generally higher.

“This Christmas season probably is the last chance for (plasma TV makers) to promote 42-inch models. By this time next year probably there will be no price difference between plasma and LCD TVs,” Credit Suisse analyst Wanli Wang said.

With little price difference, most people would choose LCD TVs because of their higher resolution, Wang said.

He expects LCD TV prices to fall 30 percent or more in 2007, compared with a decline of 15 to 20 percent for plasma TVs, due to ample LCD panel supplies.

Sharp Corp. in August started LCD production at its Kameyama No. 2 plant, the world’s first to cut panels from eighth-generation glass substrates, which can yield eight 40-inch-class panels, compared with just three panels from the sixth-generation glass used at its first Kameyama plant.

Size Matters

DisplaySearch forecasts that the plasma TV market will start shrinking in 2009 after hitting $24 billion in 2008, while it sees LCD TV demand reaching $75 billion in 2008 and $93 billion in 2010 - a trend that will likely make companies offering both LCD and plasma lines think twice about their strategy.

Taiwan’s Chunghwa Picture Tubes (CPT) is one such company. It shut down its plasma panel business this year to concentrate on LCDs.

“We cannot focus on two different products because of heavy capex (capital expenditure). That’s why we had to choose one,” CPT Chief Financial Officer James Wu said.

South Korea’s Samsung Electronics Co. Ltd. and LG Electronics Inc. as well as Japan’s Hitachi Ltd. offer both LCD and plasma TVs. Matsu****a also sells both products, although it heavily bets on plasma.

“The larger panels become, the more important response speeds for moving images are. In this point, plasma still excels,” Matsu****a President Fumio Ohtsubo told reporters last month.

CPT’s Wu agrees that plasma panels, especially 50-inch and larger ones, do excel LCDs in some aspects of picture quality, but he says the sheer size of the LCD camp will help LCD panels overcome whatever drawbacks they have in a timely manner.

“Globally, so many companies, so many investments, so many people have been working in this area, on this product. So they can improve so quickly,” Wu said.

About 80 percent of global flat screen R&D spending is being allocated to LCD panels, and the remaining 20 percent to plasma and some other technologies, Credit Suisse’s Wang said.

Getting Smaller

In a potential sign of slowing plasma TV demand, Japan’s top three plasma TV makers — Matsu****a, Hitachi and Pioneer Corp. — last month cut their unit sales forecasts by 8 to 20 percent for the year to March.

With the 40-inch-class market gradually taken over by LCD TVs, plasma models need to migrate to the market for 50-inch TVs and above, but demand is not as well developed there, analysts say.

“The United States accounts for more than 70 percent of demand for 50-inch plasma TVs and larger. In other words, there is virtually no 50-inch-class plasma TV market outside the United States,” DisplaySearch director Hisakazu Torii said.

Although demand is limited, competition is not necessarily mild. Instead of LCD models, plasma TVs will be pitting themselves against another strong rival, rear-projection TVs.

“If you take a long-term view on the plasma industry, prices are coming down and revenue will not be growing that much. That makes aggressive investments for future growth difficult,” iSuppli Japan director Junzo Masuda said.

“The number of players will likely be getting smaller and smaller,” he said.

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Pioneer N.American plasma TV sales to miss target
9 January 2007

LAS VEGAS (Reuters) - Japan's Pioneer Corp. (6773.T: Quote, NEWS , Research) said on Tuesday its North American plasma TV sales in the six months to March would likely miss an internal target by as much as 20 percent due to sharp falls in price.

"Sales are growing in unit terms, but price declines are brutal," Tom Haga, head of Pioneer's North American operations, told Reuters in an interview at the Consumer Electronics Show in Las Vegas.

"Plasma TV revenues are likely to fall short of what we have originally anticipated by 15 to 20 percent."

Pioneer was the world's sixth-largest plasma TV maker in the July-September period behind such giants as Panasonic maker Matsu****a Electric Industrial Co. Ltd. (6752.T: Quote, NEWS , Research) and Samsung Electronics Co. Ltd. <005930.K>, according to DisplaySearch.

Quitting its own plasma panel production and starting to procure key components for plasma TVs from outside manufacturers is also an option for the Japanese car and home electronics maker, Haga said.

"So far, no one has been able to supply the kind of panels we want. But (procurement) can be a possibility if someone is able to provide the panels whose picture quality meets our standards when embedded in TVs," he added.

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LCD to beat plasma in '07: Toshiba chief
11 January 2007

The dominance of liquid crystal display televisions over plasma display panel TVs in the global flat-panel TV market will grow in 2007 as high resolution televisions gain in popularity, Toshiba Corp. President Atsutoshi Nishida said in a recent interview.

"The recent expansion in the share of LCD TVs in the U.S. market has proved that consumers prefer LCDs over other types of displays" in both Japan and the U.S., Nishida said. "We are entering an age when Hi-Vision televisions with high image quality will be the mainstream.

"The technological limits of plasma displays, the image brightness of which goes down as manufacturers seek to bolster their resolution, have become clearer" in the eyes of industry researchers.

The dominance of the alliance of LCD TV makers over plasma display panel TV manufacturers "will become even more pronounced" during 2007, he predicted.

But the prices of both LCD and plasma display TVs "might keep on falling" because there will be strong pressure for LCD TV makers to cut their prices if plasma display panel TV makers reduce their prices, he said.

On the outlook for the surface-conduction electron emitter display TVs that Toshiba is developing with Canon Inc., Nishida said his company has high hopes for SED TVs' potential in view of the ultra-high image quality the SED technology enables.

Toshiba wants to prevent SED TV prices from falling and defend its brand position, even if LCD TV prices fall, he said.

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Low-End LCD Suppliers and the Death of Plasma
16 January 2007

LCD Suppliers

I've lost track of how many companies were showing LCD’s at CES 2007. A lot of no-name Chinese companies have jumped into the fray, with their only differentiator being price. Sure, Sony and others have the highest quality panels, but a large part of the growth in panels will be at the low-end of the pricing range. The result is that the LCD Supply Chain gains importance as the product is commoditized.

This opens up the game for multiple component suppliers to provide the guts for what are essentially white-box assemblers. Everyone is familiar with Chi Mei as an LCD supplier, but it’s clear to me that more independent channel suppliers will support the majority of growth at the low end.

One booth exhibitor told me that while Sony/Samsung and Sharp may sell their panels to third parties, only the manufacturers themselves knew the secrets to make their glass perform at the high quality associated with their brands. This creates the classic technology case in which third party independent suppliers provide reference designs that allow low-value add hardware assemblers to make devices that nearly match the quality of the marquee names.

The result is that superior suppliers into the commodity LCD business extract non-commodity margins. Identify those superior suppliers and you have a good investment opportunity, as they should see not just revenue growth but margin expansion over the coming years.

Expect to see some silicon or panel company become the “Intel Inside” of the commodity LCD display.

Plasma Versus LCD

Anyone walking around the floor of CES 2007 could clearly see that LCD has won, and Plasma Displays are dead. The plasma guys like Panasonic are fighting a rear guard action to extract returns on their sunk Plasma investment costs. Plasma will ship fewer incremental panels as demand for large flat panels explode, and absolute market share for Plasma will plunge. I don’t expect to see any additional investment by manufacturers in Plasma.

What few plasmas were on display all trumpeted support for 1080p, a tacit admission that the marketing war waged by Sony and Sharp to make this a consumer requirement has been successful.

The death of plasma is not a surprise. But I suspect the DLP, the brainchild of Texas Instruments, will meet the same fate as large screen LCD pricing continues to drop and quality improves. Sharp had outstanding quality 46" panels that are below $2,500 today.

The biggest impact this trend towards LCD has is virtually all large displays sold one year from now will support 1920×1080 pixels, perfect for high resolution computing applications. This new display interface in the living room is just begging to be put to use, and I suspect that CES 2008 and CES 2009 will showcase new companies that do exactly that.

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Foreign Firms Learn LCD Beats Plasma TV
26 January 2007

After a relentless price war and tough competition against local brands in 2006, foreign flat TV makers expect a better year ahead through adjustments to attract more domestic consumers, strong innovation capacity and an abundant supply of flat TV panels.

According to the State Information Center, Chinese consumers bought 4.77 million flat TV sets LCD and plasma screens out of a total 35 million TV sets purchased in the country in 2006.

Although the share of flat TV sets was only 13.6 percent of the total, sales of LCD and plasma TV sets accounted for 36 percent of 93.59 billion yuan in total sales last year.

Growth in the number of flat TV sets shipped was also impressive with a rise of 151 percent.

"China will become a major arena of competition in flat panel TV sets for global TV makers before new technologies come out," said Cai Ying, head of the State Information Center Market Information Division.

LCD TV sets accounted for over 80 percent of the shipment of flat panel television sets last year. Plasma screens represented the remaining 20 percent, a rate expected to continue as market leaders, including domestic firms Skyworth and Konka, as well as Sony and Toshiba, focused their production lines on LCD.

Last year, domestic brands continued their dominance in the LCD TV market with a share of almost 65 percent. And of the top 10 players, only three firms Samsung, Sony and Toshiba were foreign brands.

When measured in sales, foreign brands showed better performance, taking 45 percent of the total.

The performance of foreign brands in 2006 was much better than the previous year, when they only held 20 percent of the LCD market.

"Foreign brands will see a better time in 2007, especially in first- and second-tier cities," said Lu Renbo, a senior TV market expert with the State Council Development and Research Center.

First- and second-tier cities refer to the metropolises of Beijing, Shanghai and Guangzhou, as well as other provincial capitals.

Statistics from Gome Eletrical Appliances Holding Ltd, the largest home appliance retail chain in China concentrated in large cities, show the share of foreign brands rose to 44 percent in 2006 from 31 percent in 2005

The State Information Center predicts the shipment of LCD TV sets will grow by 80 percent this year to 7 million units, while the plasma set market will see a 35 percent increase to 1.1 million units.

Liu Buchen, president of the home appliance market consulting firm SBFM Management Consulting Co Ltd, believes foreign brands will be able to get about a half of the market share in 2007.

One unexpected change for foreign brands in the flat panel TV market last year was a sudden shift to LCD TV sets.

While plasma TV sets are popular in other countries due to a better visual performance on big screens and a larger viewing angle, the market suffered a setback in March when most plasma sets tested were unable to meet the national standard for high-definition TV.

The reality that plasma TV sets are most attractive in large screen configurations above 42 inches also hinders their development as ordinary consumers do not have an appetite for such big screens.

It was an unexpected blow to companies like Samsung and LG, both of which have LCD and plasma products, and Panasonic and Hitachi, which focus on plasma products.

But they adapted in the second half last year when they began to shift production and resources to LCD products, and domestic brands have seen increasing competition.

Foreign manufacturers, attacked with price wars from domestic players for over a decade, have now learned how to fight back in cost competitiveness.

Prices of mainstream 35- to 46-inch products fell by almost 40 percent last year, according to the State Information Center.

Liu with SBFM estimates the average price of domestic 37-inch LCD products will be about 8,000 yuan, while that of foreign brands will be 11,000 yuan. The price gap will be affordable for Chinese consumers, who usually think foreign brands are better quality than domestic products.

Supply may become a key factor for foreign brands to pull even in the competition.

Foreign brands such as Samsung, LG, Sony and Sharp have their own production facilities for flat TV panels, a key component in TV sets, and that gives them strong bargaining power on supplies and global reach in procurement.

Y. S. Lin, an account manager with Chi Mei Optoelctronics Corp, one of the world's top three flat panel producers, said supply of flat panels will be adequate in the first half of 2007, but there could be supply problems in the second half due to increasing global demand.

Chinese TV makers, which aim to have a bigger say in the supply of panels, have set up three production plants, but because flat panel manufacturing requires large capital outlays, the three firms issued a statement in December announcing that they were considering a merger.

The merger is expected to delay the volume production, thus adding uncertainties to domestic TV makers, many of which are investors in the production facilities.

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Japan Pioneer puts new PDP factory on hold after poor sales
31 January 2007

Poor sales of PDP (plasma display panel) televisions in the U.S. over the year-end holiday period have forced Pioneer Corp. to postpone planned investment in a new PDP factory in Japan, it said Wednesday.

The company had been planning to build a new plant west of Tokyo. It did not say when the plant will be built.

Pioneer's sales of home electronics sales dropped 2 percent to ¥113 billion (US$928 million) for the last three months of the year, it said. PDP sales fell about 10 percent, due to a substantial drop in sales of PDP TVs made by Pioneer for other companies. Sales of sets sold under its own name also fell in Japan, but increased in Europe.

The flat-panel TV market is one of the most fiercely competitive in the consumer electronics business, and prices have been dropping fast. Not only are companies competing against each other, but so are technologies: PDP is battling with LCD (liquid crystal display).

In the big-screen TV market PDP lost ground to LCD in the fourth quarter, market analyst DisplaySearch said Tuesday. PDP shipments in the quarter were 15 percent lower than the makers' aggregate forecast, and the lower-than-expected unit growth meant the first year-on-year decline in PDP revenue to date, DisplaySearch said.

For the first quarter of 2007, Pioneer said it expects to make fewer plasma displays, and also spend more money promoting them to consumers. Because of that and the poor results in the previous quarter, the company lowered its financial forecast for the full year.

It reduced its operating revenue forecast by ¥20 billion to ¥800 billion and cut its net profit forecast in half to ¥5 billion. Both forecasts are still well above last year's results.

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Matsu****a's Wary Plasma Dominance
1 February 2007

The company behind Panasonic is raking in profits, yet is concerned about falling flat-panel TV prices and LCD makers' latest offensive

Executives at Matsu****a Electric Industrial should be gloating. On Feb. 1, the world's largest consumer-electronics maker said flat-panel TVs and digital cameras were responsible for one of its best quarters in more than a decade, putting it on track for a fifth straight year of big gains. It was sweet vindication of Matsu****a's strategy of betting big on the plasma TV business.

Matsu****a (MC), which has one-third of the plasma TV market, has been kicking the stuffing out of rivals and raking in profits despite sharply falling prices of TVs and other consumer electronics worldwide. The company said third-quarter operating profit rose 5% to $1.12 billion on a 2% uptick in sales to $20 billion. The division that makes TVs, digital cameras and SD memory cards posted operating margins above 6%—a first—thanks to brisk sales and a weak yen, which boosts the value of overseas earnings. The strong performance prompted the company to revise upward its full-year net profit and sales forecasts.

Still, Matsu****a, best known for its Panasonic brand, isn't resting easy. Only a week ago, LG Electronics of Korea—the world's No. 2 plasma TV maker—reported that its digital display division had racked up a stunning $158 million operating loss in the fourth quarter and that it wouldn't expand beyond its current capacity of 550,000 panels a month. Also recording a quarterly loss was Samsung SDI, an affiliate of Samsung Electronics that specializes in plasma panels.

Plasma Worries

You would think Matsu****a would be giddy at the prospect of being able to pick up additional market share from struggling rivals. But Executive Vice-President Tetsuya Kawakami doesn't see things that way. "Having just one plasma maker in the world—Matsu****a—wouldn't be a good thing," he said.

Kawakami frets that if LG and Samsung SDI bow out of the race, consumers might get the impression that plasma is inferior to liquid-crystal displays, the other main flat-panel TV technology. Sales of flat panels have been surging at double-digit rates as consumers swap their clunky old picture-tube sets for sleek new ones. Now that TV broadcasts are changing from analog to digital and movies are being shot and stored in dazzling high-definition formats, consumers are also craving ever-larger screens to get the most out of the experience. Traditionally, the market has been divided into big plasma TVs and small- to medium-sized LCD sets. But these days LCD makers are thinking big and chasing after fatter margins, putting plasma makers on the defense.

This year, LCD sales could jump 56% to 69.7 million units, vs. a 33% gain to 12.8 million for plasma, according to market research firm DisplaySearch. The giant screens will be where the pitched battles occur in coming years. By 2010, DisplaySearch predicts nearly half of all TVs sold in the U.S. will be either an LCD or plasma screen measuring 37 in. or larger. In that period, Matsu****a thinks sales of 50-in. TVs will quintuple and 40-in. will triple, while everything else grows at a more moderate pace. "Consumers are shifting rapidly to bigger screens," said Kawakami.

Investment Plans

Matsu****a is already heavily invested in what it hopes will be a booming big-screen TV market. In January, President Fumio Ohtsubo unveiled plans to set aside $2.35 billion for a fifth plasma panel plant in Japan, even before the fourth facility, located on a nearby plot, has been finished. The new plant will make larger sheets of glass than any of the older plants, which means more panels for TVs can be cut from each sheet (see BusinessWeek.com, 1/11/07, "Matsu****a Sees a Flat-Screen Future"). By next year, Matsu****a's plants are expected to be churning out a half-million sets a month—more than 11 a minute.

Not all analysts are certain that Matsu****a's big wager on plasma will pay off. In a Jan. 29 report, Credit Suisse (CS) analyst Koya Tabata downgraded the company's stock from outperform to neutral. He cited sharp 30% annual price declines on TVs worldwide, possible unfavorable currency swings, and weak results from electronics subsidiary Victor Co. of Japan for his cautiousness over the near term. "To resolve the dilemma it's found itself in, Matsu****a has to play up the merits of plasma and sell its TVs at a premium," said Goldman Sachs (GS) analyst Yuji Fujimori. "But given the current market conditions, it will be hard to pull off."

Matsu****a's top brass is waking up to the fact it must do more to proselytize for plasma. Kawakami even spent the last few minutes of the earnings news conference rehashing the company's pitch: Plasma screens consume less energy, are cheaper to make, are better suited for fast on-screen action than LCDs, and don't tire out the eyes the way an LCD backlight can. It remains to be seen whether these selling points will convert consumers, though.

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40-inch Range LCD Panels Beat PDP Panels in 2006
2 February 2007



Monthly 40-inch Range Shipment Trends for 2006


Displaybank (CEO: Peter Kwon), a display market research institute, reported that the LCD outpaced the PDP in the 40-inch range large-size television panel market for 2006.

According to Displaybank's 'Large-size TFT-LCD Panel Supply/Demand Analysis and Forecasts' report, shipments of 40-inch range TV-use LCD panels amounted to 7.8 million units, 400,000 units way above 7.4 million units in PDP shipments. The monthly result basis comparison reveals that LCDs have already surpassed PDPs since August last year, and then, LCD shipments rose at a monthly rate of 5%, while PDP shipments plunged by more than 10%, resulting a reversal in the sequential race for 2006. This result has been increasingly in the spotlight coupled with the given intensified competition between devices in the 40-inch and larger size TV market.

Shipments of 40-inch range LCD panels jumped from 90,000 units in 2004 to 1.2 million units in 2005, and also skyrocketed by more than six times year-on-year in 2006.

In addition, Displaybank predicts that the market share of LCD panels will likely be on a further steeper upward curve in the 40-inch range market in 2007. The firm also added that PDP panel shipments are expected to record 8.1 million units, while those of LCD panels may even top 16.4 million units, more than double the PDP panels'.

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Plasma Panel Shipments Disappoint in Q4 2006, DisplaySearch Reports
7 February 2007

DisplaySearch reported in its "Quarterly PDP Module and TV Shipment and Forecast Report" that plasma panel shipments fell 4% Q/Q while rising just 3% Y/Y in Q4 2006 to 2.7 million panels. Q4 2006 was just the second quarter since Q1 2003 that plasma panels declined Q/Q. In addition, it was the first quarter that plasma panels -- which are found in plasma TVs and public displays -- grew less than 47% Y/Y.

Plasma panel shipments were 15% lower than the suppliers' aggregate forecast and 9% below DisplaySearch's forecast. The lower than expected unit growth resulted in the first Y/Y decline to date in plasma panel revenues, down 15% Y/Y and 11% Q/Q to US$1.8 billion. This decline came despite increasingly attractive plasma TV prices enabled by 7% Q/Q and 17% Y/Y reductions in plasma panel prices to a record low US$670.

The decline can be attributed to loss of share to LCD TVs at <50-inch and the limited market for 50-inch+ TVs outside of North America, resulting in an increase in channel inventories and reduced panel demand. Shipments of <50-inch panels, which accounted for 76% of Q3 2006 shipments, fell 6% in Q4 2006; shipments of 50-inch+ panels, which accounted for 24% of Q3 2006 shipments, rose 4% in Q4 2006. As a result, the 50-inch+ share rose to 26%, up dramatically from 13% in Q4 2005.

The plasma market continued to rapidly embrace HDTV formats with the HDTV share jumping to 87% in Q4 2006 vs 79% in Q3 2006 and 51% in Q4 2005. The 1080p share rose from 1.1% in Q3 2006 to 1.3% in Q4 2006 on 16% growth.

By supplier, Matsu****a reclaimed the top position and dominated the Q4 2006 market with a 40% share, up from 30% on 27% unit growth as shown in Table 1 on the strength of its Panasonic brand. It was #1 in both TVs and public displays, and also led in the three dominant sizes: 37-inch, 42-inch and 50-inch. Matsu****a was also #1 in HD and 1080p panels and became the first plasma panel supplier to ship more than one million panels in a single quarter. LGE suffered a 36% decline as a number of its major customers shifted their 42-inch emphasis to LCD. Samsung SDI also experienced a double-digit decline for the same reason as LGE. It was #2 behind Matsu****a in the two dominant products: 42-inch HD and 50-inch. Pioneer had the highest growth, up 73%, but remained #5.

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Japan PDP makers have mixed opinion on expansion plans
7 February 2007

Although leading Japan-based PDP (plasma display panel) supplier Matsu****a Electric Industrial, known for its Panasonic brand, is accelerating its expansion plan, other makers such as Pioneer and Hitachi are slowing their schedules for new plants, according to the companies.

Japan-based Pioneer has decided to postpone investments in a new manufacturing site for PDP TVs, the company recently said. Decisions on the scale of the new plant and further timing of the investments will be based on the market trend as well as a wide range of considerations such as the creation of a more efficient manufacturing framework or joint investments with other companies, Pioneer pointed out .

Hitachi as reported by Reuters that it would also postpone a decision on building its next PDP factory amid sharp price declines in the flat-panel TV market. Hitachi would reach a decision on the new plant by year-end, instead of by March, according to the report.

Hitachi is betting on both PDP and LCD and the company currently has its subsidiary Fujitsu Hitachi Plasma Display (FHP) producing PDPs while IPS Alpha Technology is involved in TFT LCD production.

Despite the potential slow expansion on PDP plant, Hitachi had a strong growth in 2006 with shipments of about 570,000 PDP TVs for the nine month ended December 31, 2006, up from 350,000 units during the same period in 2005, according to the company. Hitachi's third-quarter shipments in the fiscal year of 2006 (the year ended March 2007) totaled 250,000 units, noted the Japan-based company.

Matsu****a in January announced plans to build a new PDP manufacturing facility in Japan.

Recently, in a Business Week report, Tetsuya Kawakami, executive vice president of Matsu****a, express his concerns over the PDP market and said having just one PDP maker in the world – Matsu****a –wouldn't be a good thing, as consumers might get the impression that PDP is inferior to LCD technology.

Matsu****a was the top PDP supplier in the fourth quarter of 2006 with worldwide market share of 27% while FHP and Pioneer ranked the fourth and fifth place, respectively, according to DisplaySearch.

Worldwide PDP TV market will grow to near 11 million units in 2007, up from 8.7 million in 2006, iSuppli estimated. Rival LCD TV technology will top almost 63 million units this year, up from 40 million last year, the research firm predicted.

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LCD Passes Plasma In HDTV Race
13 February 2007

Worldwide LCD sales passed Plasma for the first time in the final quarter of 2006, according to DisplaySearch.

Plasma has dominated the flat-screen war for several years, but LCD came on strong last year with the introduction of several new models in the 40-46 inch category, once the stronghold of Plasma.

According to DisplaySearch, as reported by TWICE magazine, Sony generated the most LCD revenues worldwide in the fourth quarter while Panasonic was the leading Plasma maker.

Sony also captured the most LCD market share with 17.4 percent, followed by Samsung with 15 percent and Sharp with 11.2 percent.

Sony received a boost last year with an increased demand for its new Bravia LCD model.

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Plasma makers scale back as LCD rivals surge ahead
16 February 2007

Two second-tier plasma TV makers have postponed construction of new factories, a decision which could give momentum the offensive of rival liquid crystal display TVs.

In early February, Hitachi Ltd. said it will decide by December, instead of the initially anticipated March, when to start construction of an 80-billion-yen plant to produce plasma panels.

An official said the company needs more time to analyze the trends in product prices and demand. Hitachi had planned to put the plant into operation in summer 2008.

Pioneer Corp. said in late January that it will delay construction of a new plant for plasma panels at least until 2008. It originally planned to start building in the first half of 2007.

An official said the company decided that it will be difficult to recoup investments.

Pioneer planned to spend 20-30 billion yen to build a new plant in Yamanashi Prefecture to raise its annual production capacity by about 30 percent from the current 970,000 units.

The decisions by the two companies could lead to realignments and consolidation among plasma TV makers, analysts say.

Hitachi ranked fourth in terms of plasma panels shipped worldwide in 2006, and Pioneer fifth, according to U.S. market researcher DisplaySearch.

For global market leader Matsu****a Electric Industrial Co., the announcements by smaller rivals appear to be a mixed blessing.

"Even if we emerge as the sole winner in the global market, it will not do good to (the entire plasma TV camp)," Executive Vice President Tetsuya Kawakami said, referring to competition with LCD TVs.

Matsu****a, which accounted for 31.6 percent of plasma panels shipped worldwide in 2006, plans to build a 280-billion-yen plant in Amagasaki, Hyogo Prefecture.

The plant, which is scheduled to start operations in May 2009, will raise the company's annual production capacity to the equivalent of 23 million 42-inch plasma panels in fiscal 2010.

Matsu****a is in a dilemma, however. When it increases output, plasma panel prices will drop further, hitting smaller plasma TV makers and benefitting the rival LCD TV camp.

Plasma panel prices are falling fast, mainly because LCD panels have expanded shares in screen sizes of 40 inches or larger, which used to be a stronghold for plasma panels.

The value of global plasma panel shipments marked the first year-on-year decline during the October-December period, according to DisplaySearch. The average price hit a record low of $670 (about 80,000 yen).

In the July-September period, LCD TVs outnumbered plasma TVs for the first time in global shipments of flat-panel sets in screen sizes of 37 inches or larger, according to DisplaySearch.

Makers of flat-panel TVs have been investing aggressively to expand capacity and cut costs to survive the intensifying price competition.

Instead, Hitachi and Pioneer plan to improve productivity of existing assembly lines, at least for the time being.

Plasma TVs dominated the market of large-screen flat-panel sets with lower prices and higher picture quality, compared with LCD TVs.

It costs less to produce large-screen models because plasma panels have a simpler structure with a smaller number of components.

LCD TVs, however, have increased price competitiveness in large-screen sets because component prices have fallen and production technologies have improved thanks to a large number of players.

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PDP shipments wane as LCD fortunes climb
7 March 2007

Global plasma panel display (PDP) shipments fell 4% quarter-on-quarter during Q4 2006 to 2.7 million units, according to leading industry analyst DisplaySearch.

The figures also show that 2006 was the worst year for PDP channel players since plasma technology became available to the market. Shipments were 15% lower than suppliers had initially forecast and came in 9% below DisplaySearch’s predictions.

This was also the first period that PDP unit shipments grew by less than 47% year-on-year.

The figures looked even gloomier when it emerged that 2006 saw the industry’s first year-on-year decline in revenues. The dip in revenues saw the global market drop to US$1.8 billion in Q4 2006, down 11% quarter-on-quarter, and 5% year-on-year.

The results represent only the second quarter-on-quarter fall in shipments since Q1, 2003. The figures proved a major disappointment for suppliers showing a meagre 3% growth year-on-year.

Matsu****a reclaimed the top position in the global market with a 40.1% share of the market during Q4, up from 30.4% for the same period in 2005, enjoying a growth rate of 27% year-on-year on the strength of its Panasonic brand.

Market developments in 2006 saw South Korean companies LGE and Samsung SDI as the PDP market’s major casualties. LGE dropped from the top spot in the PDP segment with a 21.5% market share in Q4, 2006 compared to 32.5% for the same period the previous year.

The company also suffered a 36% decline, in terms of growth, as a number of the company’s clients in the 42-inch-plus categories opted for LCD technology according to the report.

DisplaySearch also cited the same reasons for Samsung SDI’s 14% decline, in terms of growth, finishing Q4, 2006 with a 20.8% market share compared to 23.2% for the same period in 2005.

Pioneer enjoyed the highest rate of growth with 73%. However, the company still ran in at number five in the global market with an 8.5% overall marketshare for the surveyed period.

The DisplaySearch report also stated that the global downturn in unit shipments came about despite a 7% quarter-on-quarter, and 17% year-on-year, drop in plasma panel prices resulting in some PDP TV units retailing at a “record low” of under US$670.

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Philips pulling out of PDP TV market
14 March 2007

During a recent press event in Hong Kong, Rudy Provoost, CEO of Philips Consumer Electronics said the company has decided to phase out of the PDP (plasma display panel) TV market and focus on LCD TVs in the future.

Except for North America and Australia, Philips will drop PDP TV sales and it plans to stop PDP TV sales in China later this year, Provoost pointed out.

Philips currently offers 42- and 50-inch PDP TVs in China, according to the company's website. At the Consumer Electronics Show (CES) 2007 in Las Vegas (January 8-11), the company showcased a 63-inch PDP TV (63PFP7422D) and said the new TV will hit the market in June with a suggested retail price of US$3,499.

Besides Japan-based Hitachi, Toshiba, Panasonic and Korea-based LG Electronics (LGE) and Samsung Electronics, Philips is one of the major flat-panel TV vendors that are betting both on LCD and PDP technologies.

Philips ranked the fourth in the global PDP TV market for the full year of 2006 with a 10% revenue share, trailing Panasonic, LGE and Samsung, according to DisplaySearch. The Netherlands-based company ranked the second place in LCD TV market with a revenue share of 13.0%, with Samsung being the top player, the research firm added.

The major PDP TV manufacturer for Philips is TPV Technology, sources said, indicated that Quanta Computer and TPV produce LCD TVs for the company.

Philips plans to ship nine million LCD TVs in 2007, up from more than five million in 2006, according to DisplaySearch. Philips Taiwan said the company is unavailable to provide its PDP TV shipment target for 2007.

Unlike its LCD TV business, for which Philips has 32.9% of stake of LG.Philips LCD, a leading LCD TV panel maker, Philips does not have any PDP plants to support its own-brand PDP TV business.

In addition, Philips' decision is probably related to the strong growth of the LCD TV market, sources said. According to iSuppli, worldwide LCD TV and PDP TV markets will grow to 63 million and 11 million units, respectively, in 2007, up from 40 million and nine million units, respectively, in 2006. To stay competitive, PDP TV makers now are eying the 50-inch-and-above segment, which has become the new divide between LCD and PDP technologies, as opposed to the previous divide at the 40-inch level.

Last year, Sony stated it will stop producing PDP TVs. The Japan-based giant has slowed its PDP TV shipments in recent years. Sony's output of PDP TVs totaled only 100,000 units in fiscal year 2005 (the year ended March 31, 2006), down 67% from 300,000 units in the previous year, according to Sony.

Nevertheless, a January 16 report quoted market rumors in saying Sony is considering returning to the PDP TV market and is in talks with Fujitsu Hitachi Plasma Display (FHP).
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LCD a huge threat to plasma
23 March 2007

Despite growing sales, manufacturers of plasma panels are under increasing pressure as the LCD competition enjoys tremendous success.

Although demand is currently higher than supply, plasma producers are forced to reduce prices hugely in order to stay competitive and as a result are concerned about profits.

The drop in prices is also eating away at turnover. Whilst sales volumes for plasma panels are set to increase by 14 percent each year until 2011 according to iSuppli market researchers, prices could fall by as much as 13 percent per.

If this is the case, the plasma panel market will only see a slight increase in turnover in the next five years. "The growing number of consumers opting for LCD TVs will increase the pressure to be competitive", predicts iSuppli analyst Riddhi Patel.

Last year, panel manufacturers sold approximately ten million panels worldwide, making 7.7 billion dollars in sales. By 2011, panel sales volumes should more than double to 22.7 million panels per year.

Researchers at iSuppli foresee sales of 13.4 million for the glass substrate used in plasma TVs, reports DigiTimes.

Because of falling prices and general uncertainty about the future, most manufacturers are holding back on processing their capacities or are even reducing production volumes.

Not so with leading plasma manufacturer Matsu****a, better known as the brand name Panasonic. Just last January, the company began work on the largest plasma factory in the world with a view to dominating the market for large format flat-screen televisions.

In any case, Panasonic certainly defended its leading position amongst plasma panel manufacturers in the last quarter of 2006 with a market share of 37.3 percent.

In second place was LG Electronics with a market share of 24.2 percent, followed closely by Samsung SDI, with a market share of 21.1 percent.

Here, the two Korean electronic giants fell behind and suffered in terms of turnover and market share: fourth and fifth places were occupied by Fujitsu Hitachi Plasma (10.7 percent) and Pioneer (6.8 percent). (Source: pte)

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LGE reportedly considering selling PDP business
26 March 2007

Lee Seung Hyuk, an analyst with Woori Investment & Securities, recently was reported by Bloomberg as saying LG Electronics (LGE) may sell or spin off its PDP (plasma display panel) module business due to mounting losses, according to the Chinese-language website ccidnet.com.

Jo Chang Hyun, spokesperson of LGE, was quoted as saying that the company has not finalized any decisions for the future direction of its PDP division. According LGE's financial report in January, the company saw losses from its display business widen to 147 billion won (US$156.9 million) in the fourth quarter of 2006, compared to a loss of 81 billion won in the same period in 2005, and the company reportedly expects PDP display prices to drop 30% this year.

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Plasma TV Sales, Prices Decline for the First Time
11 April 2007

Revenue for plasma televisions took a substantial hit in February, according to the latest figures released by the NPD Group on Tuesday, generating only $181 million compared to the nearly $216 million in February 2006.

While the consumer electronics market also dipped as a whole, the decrease in plasma TV sales was a 16 percent dollar volume drop in February when compared to the same period last year. This was the first ever year-over-year decline in revenue for plasma units, according to the NPD Group.

NPD attributed the drop to continuing price declines that drove the category down more than 35 percent from February of 2006. The average price of a plasma TV in February was $1,688, according to the NDP, which represents the second lowest price in three years, just shy of November's $1,672.

"Unlike LCD TVs, plasma TVs have not been able to offset lower average prices by reaching high volumes in their larger screen sizes," said Ross Rubin, the NPD Group's director of industry analysis, in a statement.

"While these lower prices have allowed plasma manufacturers to reach out to a broader consumer base with a differentiated display technology, it's still not enough to keep revenue on the rise."

However, they have tried to increase the quality of their displays. Panasonic, for example, on Tuesday announced plans to make a 42-inch plasma HDTV, the first HDTV plasma of that size.

February's decline also came despite a 30 percent uptick in actual unit sales, the NPD Group said. Best-selling screen sizes for the month included 42-inch plasmas followed by 50-inch models, which are continuing to grow in popularity. Fifty-inch plasmas were also the top revenue producers for the month, with an average price of $2,040.

Despite a slow down in most CE categories and an 18 percent drop in overall TV unit sales that month, televisions continued to dominate the space, bringing in over $900 million in revenue. As expected, LCD TVs showed the highest revenue growth with a 58 percent dollar volume increase over February 2006.

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LG Electronics reported its biggest quarterly loss in four years
19 April 2007

Citic Capital Partners, the private equity arm of China's bigge: LG Electronics, South Korea's second-largest electronics maker, reported its biggest quarterly loss in four years as mounting competition and a glut forced the company to cut prices of television screens.

The net loss was 122.6 billion won, or $132 million, in the three months ended March 31, compared with a profit of 151 billion won a year earlier, the company said. Sales rose 4 percent to 6.03 trillion won.

The results may stoke speculation that Nam Yong, approved last month as chief executive, may reorganize or sell the company's unprofitable plasma division. LG, the world's second-largest plasma display maker, forecast continued losses at the plasma business this quarter.

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Samsung SDI in flatpanel TV crisis
25 April 2007

Korean flatpanel giant Samsung is in crisis. Its panel making subsidiary SDI has posted the biggest loss in its 37 year history, with Q1 financials revealing an operating loss of 110 billion Won, compared to an operating profit of 42 billion Won in 2006. The collapse is largely due to a worse than expected performance from its PDP plasma module division. Figures reveal that sales have dropped 33.4 per cent.

Samsung SDI vice president Lee Jung-wha expects sales to improve for Q2, but he cautions that the company will remain in the red.

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DisplaySearch Reports Plasma Panel Shipments Fall for the First Time in Q1'07, Revenues Drop 28%
7 May 2007

AUSTIN, TEXAS, May 7, 2007--DisplaySearch, the worldwide leader in display market research and consulting, reported that plasma panel shipments fell for the first time on a year-over-year basis in Q1'07 in the latest issue of its Quarterly PDP Module and TV Shipment and Forecast Report. Plasma panel shipments fell 14% Q/Q and 1% Y/Y to 2.3M panels, the lowest result since Q3'05. Plasma panel suppliers' aggregate survey results indicated that they were expecting flat results in Q1'07 after a weak Q4'06, so the 14% decline was disappointing. With the plasma panel surplus widening significantly, blended ASPs fell 13% Q/Q and 27% Y/Y to $582, a new low, despite steady gains in average size. With units and ASPs down, revenues plummeted 26% Q/Q and 28% Y/Y to $1.3B, the lowest value since Q2'05.

The decline can be attributed to loss of share to LCDs, particularly 1080p LCDs, at 37" and larger sizes. In addition, LCD TV panels also experienced a larger than expected decline in Q1'07, down 9% Q/Q in Q1'07, because demand was pulled in from Q1'07 to Q4'06 as the result of sharper than normal retailer discounts in the holiday season.

The average plasma panel diagonal grew from 43.2" in Q1'06 and 43.9" in Q4'06 to 44.3" in seasonally weak Q1'07. The 50" and larger share rose from 26% in Q4'06 to 29% in Q1'07 as the 50"-42" HD price gap narrowed by 21% to under $300.

1080p resolution plasma panels declined faster than the market, dropping 24% Q/Q. This is disappointing given that 1080p LCD panels rose 19% Q/Q in Q1'07. Plasma panel suppliers need a faster transition to 50"+ and 1080p to offset the rapid price declines and share declines at 42" to enjoy revenue growth. Rising competition from 52" 1080p LCD is also a concern.

Fortunately for PDP suppliers, rapid 1080p growth is expected in Q2'07 with Matsu****a ramping 42" and 50" PDP along with 58", 65" and 103". In addition, Samsung and LGE just began shipping 1080p plasma panels in Q1'07 with Samsung expected to ramp 50" and 63" 1080p shipments and LGE expected to boost 60" 1080p output. With Pioneer and Hitachi also producing 1080p panels, all major plasma suppliers are now shipping 1080p panels.

By supplier, Panasonic remained #1 with a 31% share, down from 40%, on a 33% decline. Panasonic will likely enjoy the fastest growth in Q2'07 while it introduces its new line-up, as it did in Q2'06 . It was #1 in TVs and Public Displays and led in all 1080p categories as well as at 37". It was #2 at 42" HD and 50" HD. LGE remained #2 with its share rising from 22% in Q4'06 to 27% in Q1'07. It was the only major supplier to enjoy Q/Q growth in Q1'07, up 8% Q/Q. It was #2 in both TVs and Public Displays. LGE was #1 in the rapidly declining 42" ED category and also led at 60-65". Samsung SDI remained #3 with its share rising from 21% to 24% on just a 2% unit decline. It was #1 in 42" HD and 50".

Looking forward, plasma panel suppliers are expecting double-digit Q/Q and Y/Y growth panels in Q2'07 on stronger seasonal demand along with new product transitions with a growing emphasis on 1080p. According to manufacturers' targets, 1080p share is expected to rise from 1% in Q1'07 to 8% in Q2'07, rising over 700%.

DisplaySearch will also be discussing its TV and TV panel outlook at its Taiwan FPD Conference May 10-11 in Taipei along with senior executives from AUO, CMO, LGE, LPL, Philips, Samsung SDI, Sharp and TPV. For more information, please visit the conference website.

For detailed PDP module shipments, PDP supply/demand, PDP TV shipments by brand and region and rolling 16-quarter shipment, cost and pricing forecasts, please see the latest Quarterly PDP Module and TV Shipment and Forecast Report. For information on any DisplaySearch report, contact Arie Braun for additional information at (512) 459-3126, x108 or [email protected] or contact your regional DisplaySearch office in Japan, Korea, Taiwan and China.

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Plasma Sales Fall As Retailers Cut Back
7 May 2007

Plasma TV screens are being shunned by consumers according to DisplaySearch’s “Quarterly PDP Module and TV Shipment and Forecast Report.” In addition, a recent research study by SHN reveals that mass retailers are cutting back plasma to be only 25% of their TV mix.

Plasma panel shipments fell 14 percent quarter to quarter and 1 percent year to year, to 2.3 million panels. DisplaySearch called it "the lowest result since the third quarter of 2005." At the same time mass market retailers are set to cut back floor space for plasma screens in favour of LCD TVs.

"Yes we will stock plasma but it will be a significantly smaller volume than in the past. And the models we stock will have to have a good margin for us to range it," said one mass market retailer.

"Plasma panel suppliers' aggregate survey results indicated that they were expecting flat results in the first quarter of 2007 after a weak fourth quarter in 2006, so the 14 percent decline was disappointing," DisplaySearch stated.

With the plasma panel surplus widening significantly, blended average selling prices fell 13 percent quarter to quarter and 27 percent year to year to US$582, a new low, despite steady gains in average size.

"With units and selling prices down, revenues plummeted 26 percent quarter to quarter and 28 percent year to year to $1.3 billion, the lowest value since the second quarter of 2005," according to the analyst's report.

DisplaySearch attributed the decline to a loss of share to LCDs, particularly 1080p LCDs, at 37 inches and larger sizes.

DisplaySearch said that LCD TV panels also experienced a larger than expected decline in the first quarter, down 9 percent from the same quarter in 2006.

This resulted from strong demand in the fourth quarter of 2006, which drew sales that ordinarily would have come in the following quarter.

The average screen size for a plasma panel grew from 43.2 inches in the first quarter of 2006 to 43.9 inches in the fourth quarter of 2006 to 44.3 inches in the seasonally weak first quarter of 2007.

The 50 inch and larger share rose from 26 percent in the fourth quarter of 2006 to 29 percent in the first quarter of 2007 as the 50-42 inch HD price gap narrowed by 21 percent to under $300, DisplaySearch said.

Plasma panels with 1080p resolution "declined faster than the market, dropping 24 percent quarter to quarter," the analyst said. "This is disappointing given that 1080p LCD panels rose 19 percent quarter to quarter in the first quarter of 2007.

"Plasma panel suppliers need a faster transition to 50 inch-plus and 1080p to offset the rapid price declines and share declines at 42 inches to enjoy revenue growth."

Rising competition from 52-inch 1080p LCD is also a concern, DisplaySearch said.

Rapid 1080p growth is expected in the second quarter of 2007 with Matsu****a ramping 42-inch and 50-nch PDP along with 58-inch, 65-inch and 103-inch screen sizes. In addition, Samsung and LGE just began shipping 1080p plasma panels in the first quarter of 2007 with Samsung expected to ramp 50-inch and 63-inch 1080p shipments and LGE expected to boost 60-inch 1080p output.

Pioneer and Hitachi are also producing 1080p panels.

By supplier, Panasonic remained No. 1 with a 31 percent share, down from 40 percent, on a 33 percent decline.

DisplaySearch predicted Panasonic would repeat its performance of a year ago and post the fastest growth in the second quarter of 2007, after it launches its new line.

Panasonic was No. 1 in TVs and public displays and led in all 1080p categories as well as at 37 inches. It was No. 2 at 42-inch HD and 50-inch HD.

LGE remained No. 2 with its share rising from 22 percent in the fourth quarter of 2006 to 27 percent in the first quarter of 2007.

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PDP demand shows slowing down trend
9 May 2007

The on-year drop of PDP (plasma display panel) shipments in the first quarter of 2007 highlights PDP TV's fading role against LCD TV, the slow down of the PDP TV market in the US, and the production adjustment among PDP TV makers.

According to DisplaySearch estimates, PDP shipments dropped by 14% on quarter and 1% on year at 2.3 million units, marking the first on-year shipments decline on record.

The rising role of 37-inch and above LCD TVs is said to be one of the main reasons for the shrink of PDP shipments, especially for those of 1080p-grade resolution, industry players commented. According to DisplaySearch, 1080p LCD TV panel shipments were up 19% on quarter, at the expense of same-resolution PDP shipments which saw a 24% sequential fall.

In attempts to win back lost market share, more PDP makers are aggressively rolling out more models with 1080p resolutions. Starting from the second quarter of 2007, Matsu****a will focus sales of 42- and 50-inch 1080p PDPs, while Samsung SDI will focus on 50- and 63-inch, and LG on 60-inch. Pioneer and Hitachi have also introduced new models with similar specifications models recently.

Besides the rise of LCD TV, the saturated PDP TV market is also another chief reason for the decline, industry players noted. They highlighted that sales growth for 50-inch and above size large-size TVs in the US is very slow with most consumers preferring to have their large-size TV use rear-projection TV (RPTV) technology.

Although regions like Australia and Europe have been picking up their demand for 50-inch and above TVs recently, penetration growth is still slow. According to DisplaySearch, global shipments for 50-inch and above PDPs only saw a three percentage points growth to 29% in the first quarter of 2007.

PDP makers who shifted to produce high-end panels also drove down PDP shipments, industry players pointed out. As consumers pursue better image quality, PDP makers are prompted to advance their production. However, PDP makers have to adjust the full production line settings, instead of just adjusting some production parameters as LCD panel makers do, when doing the migration to XGA or full high-definition (HD), which leads to a affect upon supply.

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Another Company Bails on Plasma
11 May 2007

Panasonic is the big dog in the plasma display market, and their planned production expansion is a measure of their commitment to the market. Others are not so confident that plasma can remain competitive, however. Direct view LCD has already taken over the HDTV market up to 50”, and is poised to make a fight for the 50? to 55? range.

So it should not be a shock that Funai Electric announced that it will be exiting the plasma TV market, according to a report in today’s DigiTimes. According to the report, Funai gets their plasma panels from LG Electronics. The company plans to focus on its LCD HDTV business instead. The company is known in the United States for its Sylvania, Emerson, and Symphonic brands.

As LCDs push to offer true 1080p resolution for smaller and smaller price premiums over 720p, it will be harder and harder for plasma to maintain its market share. Panasonic and Pioneer remain committed to plasma, but don’t be surprised to see others turn their attention to just direct view LCD and rear projection models.

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Another company withdrawing from PDP TV market
11 May 2007

Japan-based Funai Electric recently said it is exiting the PDP (plasma display panel) TV market due to sharply-falling ASP (average selling price) and rising competition from vendors such as Panasonic, according to the Japanese- language newspaper Nihon Keizai Shimbun.

Funai offers 42-inch PDP TVs in North America with panels sourcing from LG Electronics (LGE). The TVs are manufactured in Malaysia, the paper quoted sources as saying. Sales volume from its PDP TVs in North America were no more than 100,000 units in 2006, the paper noted.

In the future, the Japan-based company will focus on LCD TV business, added the paper.

During a recent announcement of its fiscal year of 2006 (the year ended March 2007) performance in May, Funai updated its LCD TV business strategy and highlighted the company is scheduling to launch a 42-inch full high-definition (HD) LCD TV in the US in mid-2007. The company will also have a full line up of LCD TVs, from 15- to 37-inch models with a DVD player, noted Funai.

The Japan-based player is also planning to seeking for more LCD TV OEM orders, stated the company. In addition to OEM business, Funai also has brand names of Sylvania, Symphonic, Funai and Emerson.

Meanwhile, Funai announced that its new LCD TV plant in Poland will commence operation next month with monthly capacity of 200,000 units. The new plant should help the company to shorten lead time, reduce the inventory level of finished goods and lower tariff, said the Japan-based company.

Funai shipped about 600,000 LCD TVs in fiscal year 2005, sources said, adding that Funai is aiming for LCD TV shipments of 1.8 million units worldwide in fiscal year 2006.

Funai holds a 1.2% stake in Chi Mei Optoelectronics (CMO) and about 90% of Funai's LCD TVs use panels from CMO, according to sources.

The company was the world's number six LCD TV maker in the third quarter of 2006 with market share of 5.3%, according to DisplaySearch.

In March, Royal Philips Electronics announced it has decided to phase out of the PDP TV market and focus on LCD TVs in the future. In 2005, Sony also decided to drop out of the PDP TV sector.

Funai also ships CRT TVs and front projectors.

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China market: PDP TV and RPTV shipments drop sharply in 1Q07
15 May 2007

China only produced 110,000 PDP (plasma display panel) TVs in the first quarter of 2007, down 31.7% from 161,000 units in the same period of 2006, according to a survey from China's Ministry of Information Industry (MII).

Shipments of rear-projection TVs (RPTVs) from China dropped 95.5% on year to 20,000 units in the first quarter, said the survey.

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LCD winning in TVs, plasma to fight back
17 May 2007

SEOUL — As happy consumers hail tumbling TV prices and dream of the biggest flat-screen size their living rooms can accommodate, Sony Corp. and other LCD makers are emerging as the winners of a long, pricey TV war.

But their battle with rival plasma screens isn't over yet and makers of plasma display panels (PDPs) such as Matsu****a Electric Industrial Co. Ltd. and Samsung SDI Co. are likely to strike back as the industry standard moves to bigger TVs.

Plasma screens, which once dominated the 40-inch-and-larger TV market with cheaper price tags and a more natural picture quality, have lost ground as liquid crystal display (LCD) makers have been able to roll out bigger screens at cheaper prices by introducing larger production lines that cut down on costs.

Plasma makers have also until recently failed to offer full high-definition screens in the sub 50-inch market, as it costs more to make the upgrade for plasmas than for LCDs.

As plasma's popularity dwindles, some analysts fear plasma makers are at the risk of becoming a niche market player.

"The 50-inch-and-up market is the only segment plasma has an advantage for now," Hyundai Securities analyst Jeff Kim said. "LCD has won the battle with better picture quality as consumers went for TVs better suited for digital broadcasting."

Japan's Sharp Corp., the world's third-largest LCD TV maker, last month posted a record annual profit for the fourth straight year, while Pioneer Corp. and Hitachi Ltd. have been losing money on their plasma TV business.

South Korean plasma panel maker LG Electronics Inc. and Samsung SDI also posted quarterly losses hit by sliding prices. LG's chief executive last month denied a market talk that the company would sell its plasma business after its poor performance spured such speculations.

Confirming the grim picture, plasma panel shipments fell for the first time from a year ago in January-March, down 1 per cent to 2.3 million panels, according to research firm DisplaySearch.

But it's not all doom and gloom for plasma TVs.

Leading player Matsu****a, which controls one-third of the global plasma TV market, has been able to weather the industry's sharp price falls thanks to its brand name, cost cuts and economies of scale.

The Panasonic maker and maybe a few others can maintain an edge in the upcoming battle with LCD TVs, analysts say.

SECOND ROUND IN BIGGER TVS

Plasma TV sets use tiny pockets of gases to display images and displays more natural colour. LCDs use crystals sandwiched between glasses and a backlight unit, boasting of brighter, high-resolution images.

As falling prices encourage consumers to look for bigger TVs, the two technologies are set to fight fiercely again in a new market: TVs larger than 40s-inch.

"The 50-inch-and-up segment will become a battlefield soon — as early as the second half," said Park Hyun, an analyst at Prudential Securities. "A full-fledged showdown will come next year as LCD has further room for cost cuts."

Sharp and Samsung Electronics built new, larger production lines to tackle the 50-inch grade market where PDPs still enjoy a price advantage.

However, unlike the time LCD overtook plasma in smaller segments, the LCD camp's capacity to make 50-inch and larger panels is not yet large enough to be an immediate threat to plasma makers, Champ Shin, vice president in charge of TV panel sales at LG.Philips LCD Co. Ltd. said.

"It may take a little longer than the past." Shin said at the Reuters Technology, Media and Telecoms Summit in Seoul. "Above 50 inches, LCD does not have enough capacity to compete."

Plasma makers have no intention of losing this market to LCD.

"PDP has a set of strengths in 50-inch-and-bigger screens in terms of cost and picture quality. We won't let (LCD) take over that easily," said Sky Park, Samsung SDI's vice president in charge of PDP marketing said.

Once the price difference disappears, however, it would deal a serious blow for underperforming plasma makers as the size of ultra-big TV market is limited, especially in Europe and Asia where an average house is much smaller than in the United States.

The market for 40-inch-grade TV to grow to 47 million units in 2010 from 13.5 million last year. In the same period, sales of 50-inch-and-larger TV sets is expected to increase to just 15 million from about 5 million, according to DisplaySearch.

Many LCD makers have also seen losses due to falling panel prices, but their outlook is set to brighten later this year. LG.Philips LCD expects to turn profitable as early as during the second quarter after four consecutive quarters' losses.

"LCD has an edge, but I don't think PDP will disappear. It has its own strength in the larger TV segment," said S.I. Lee, senior vice president of Samsung Electronics, which makes both LCD and plasma TVs.

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Pioneer Takes Another Hit to the Bottom Line
18 May 2007

On Monday, May 14, the Smart House Web site (www.smarthouse.com.au) reported that Pioneer Electronics incurred a loss of more than $67M for the past fiscal year after writing down its plasma TV operations.

This announcement came not even a week after the company launched its new line of Pioneer and Elite plasma HDTVs in New York City. The new models feature a re-designed cell structure and claim super-low black levels, high contrast, and saturated colors.

According to the Smart House article, Pioneer posted a net loss of $56.3M for the fiscal year ending March 31. The company had originally forecast a profit of ¥5B (about $41M), while a poll of 15 analysts by Reuters Estimates called for a ¥4.5B ($37M) profit. (Pioneer has not yet officially released its earnings for fiscal 2007.)

While the company’s financial results are aren’t as bad as reported the previous fiscal year, it’s obvious that the rapid drop in plasma prices and the surge in product from Panasonic, Samsung, and LG (who also lost money in plasma last year) are body-slamming Pioneer repeatedly to the ground.

As the smallest of the "Big 5" plasma manufacturers in terms of capacity (and with a market share of just 8.5% in 2006), Pioneer doesn’t have all that much leverage on the market. Moreover, two consecutive years of losses will put a big crimp in the company’s plans to sell 330,000 plasma HDTVs in North America this year without resorting to further discounting.

While no one disputes the quality of Pioneer plasma displays, the company’s brand name is not being leveraged nearly enough in the HDTV market, in my opinion. LCD HDTVs are in high demand now, and Pioneer is missing an opportunity in the 32-inch to 47-inch range by not bringing out a line of Elite-brand 1080p LCD HDTVs, much as Mitsubishi has done in their 2007 product line.

Interestingly, Pioneer’s Australian subsidiary had plans to do exactly that under an OEM deal, according to Smart House, but was stopped cold by executive management in Japan, who seems to have adopted a "sink or swim" mentality with regards to plasma technology.

For the next fiscal year, the company is forecasting a profit of ¥12.5B ($103M) and plans to increase its 77% stake in Tohoku Pioneer, which makes automotive speakers and organic EL (electroluminescence) displays for mobile devices. The silver lining around the cloud is that Pioneer’s car audio and navigation systems are still strong performers, but can sales of those products overcome losses from plasma operations?

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LG Electronics to stop making plasma panels at 1 of 4 South Korean plants
18 May 2007

SEOUL, South Korea: South Korea's LG Electronics Inc. said Friday it is closing a plant that makes plasma display panels to cut costs and rejuvenate its business in the sector.

The company will stop producing flat panels at one of its four PDP plants in Gumi, 260 kilometers (160 miles) southeast of Seoul, said LG spokeswoman Judy Pae.

Pae said the shutdown is scheduled for the first half of this year.

"This move is to increase operational efficiency and to reduce costs" totaling US$22 million (€16.3 million) to US$32 million (€23.7 million) annually, LG Electronics said in a statement issued later.

"This is a part of LG's ongoing efforts to improve the performance of its plasma display panel business as a whole," the statement said.

LG Electronics is South Korea's largest consumer appliance manufacturer. The company is the world's second-largest plasma display maker by shipments. It is also a major global producer of cell phone handsets.

The plant to be shut, named A1, is the oldest of the company's four and has an annual capacity of 840,000 42-inch plasma panels used in flat screen televisions, or 70,000 a month.

LG's total 42-inch plasma display module production capacity will decline to 360,000 units per month, or 4.32 million a year, with the loss of the A1 plant, the statement said.

LG Electronics lost 123 billion won (US$132.1 million; €98 million) in the three months ended March 31. It recorded net profit of 150.8 billion won a year earlier.

Pae confirmed that LG's plasma division suffered a loss in the first quarter, but said she could not specify how big it was.

The market for flat panels, which includes plasma and liquid crystal displays, has suffered amid oversupply and falling prices for the components.

LG competes with other plasma makers including South Korea's Samsung SDI Co. and Japan's Matsu****a Electric Industrial Co.

Nam Yong, LG's chief executive, last month denied speculation that there were plans to sell or shut down the plasma business, telling investors and analysts that the company would study the best way to proceed, according to Pae.

Samsung Electronics Co. and South Korea's LG.Philips LCD Co. are the world's two top manufacturers of liquid crystal displays. LG.Philips is a joint venture between LG Electronics and Royal Philips Electronics NV of the Netherlands.

Investors appeared to take the news positively, pushing up shares in LG Electronics 1.3 percent to 69,000 won (US$74; €55). LG.Philips LCD added 1.7 percent to 39,150 won (US$42; €31).

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Doesn’t Anybody Around Here Know How To Play This Game?
21 May 2007

PETER PUTMAN, CTS

Casey Stengel’s immortal comment fits perfectly after hearing the 2007 fiscal year results from several of the display industry’s heavy hitters in Japan and Korea. Most of those results were not good, and in some cases the company’s financial losses were substantial.

Sony Corporation reported a net loss for fiscal 2007 of just under $2B in their games division, mostly due to missed sales targets and excess inventory of the company’s flagship PlayStation 3 product. While their other divisions (including TVs and other displays) did reasonably well, they couldn’t prevent a company-wide 68% drop in operating income from fiscal 2006.

Pioneer Electronics (which at the time of this writing had not “officially” released its fiscal year results) managed to flip analyst’s expectations on their heads and turn a projected $40M profit into a $56.3M loss for the past fiscal year. The company blamed the loss primarily on a steep downturn in plasma prices, which was also exacerbated by an overall decline in plasma shipments for the first quarter of this year.

Matsu****a Corporation, the parent company of Panasonic, has made heavy investments in plasma fabrication and expects to manufacture 11 million panels a year by 2008. They managed to increase net income by 18% to $1.8B for the most recent fiscal year, but missed their target of $2B. Former subsidiary JVC (which should be sold to the TPG Group by the time you read this) rang up $64M in losses for the same time period.

How about the Koreans? LG Electronics, which proudly bills itself as the largest manufacturer of flat panel HDTVs in the world, incurred more than $140M in net losses from plasma manufacturing in 2006. Samsung SDI (the company subsidiary that manufactures plasma) reported a net loss of $77M for the first quarter of 2007, while Chinese LCD manufacturing giant AU Optronics racked up a $152M loss in the same time period.

Hitachi Electronics’ fiscal 2007 net loss of 32.8B yen (about $271M) was no doubt a contributing factor in the company’s decision this past February not to expand capacity at their Kyushu plasma operations (Fujitsu Hitachi Plasma Display Ltd). The decision was also driven by 20% annual decreases in ASPs of plasma HDTVs. (Pioneer also shelved plans to expand their plasma manufacturing capacity any time soon.)

Yikes! Is there nothing but bad news coming out of Asia these days? It certainly seems so, given how all of the once-legendary Japanese consumer electronics brands are struggling to maintain profitability. While Sony’s drop in net income is directly attributable to losses incurred both in manufacturing and selling PlayStation 3 consoles, the company still posted an operating profit and remains strong in sales of rear-projection and LCD HDTVs.

Matsu****a, under pressure from investors to push profit margins up above 5%, finally agreed to put its 52% stake in JVC up for sale and will likely see a $600M+ boost to their bottom line as a result. In the meantime, JVC is likely to be broken up and sold off, most likely to Chinese interests who see tremendous value in the JVC brand.

Pioneer’s losses are directly attributable to their position at the high end of plasma HDTV pricing. With a small share of the North American plasma market (about 8% in 2006) and less manufacturing capacity than the other four plasma manufacturers, the company is being slammed by the dog-eat-dog flat panel pricing wars.

Yet, they continue to bring out high-end plasma products, most notably four new Elite-brand plasma HDTVs shown in May. Two of them offer full 1920x1080 resolution, albeit at a substantial premium over competitive products from Panasonic and Samsung. And in what must be characterized as a state of complete denial, there will be two new 42-inch XGA (1024x768) plasma sets for 2007, selling for $2,700 and $3,200 (MSRPs) respectively.

These products completely ignore the fact that 42-inch XGA plasma is on its way out the door, pushed by 42-inch 1080p LCD HDTVs that are already selling for less than $2,000. And it doesn’t help matters that Panasonic has brought out a 42-inch 1080p plasma for under $2,500 as part of their 2007 lineup.

LG’s financial hemorrhaging is directly attributable to playing the “race to the bottom” game. In addition to cutting margins to the bone, the company experienced a 36% decline in market share for the fourth quarter of 2006, which is the all-important holiday selling season. Samsung SDI was subjected to a 14% decline during the same time period.

But the saving grace for both companies is that they have a “Plan B”, which is their ability to pull the plug entirely on plasma and concentrate on their bread and butter business — LCD panel manufacturing. (And you can expect that to happen by the end of the decade.)

Unfortunately, Hitachi and Pioneer don’t have that option, and must sink or swim in large flat-panel manufacturing with plasma technology — unless executives in each company can be convinced to private-label large LCD panels as a complement to the existing plasma HDTV products.

Sony, who once sourced plasma HDTVs and monitors from former fabber NEC (who sold their fabs to Pioneer), now concentrates on getting LCD panels from their S-LCD partnership with Samsung and from Chinese supplier TPV. That decision might look like pure genius right now — Sony’s brand name is still exceptionally strong and has helped the company overcome several missteps in consumer electronics the past few years.

Panasonic, who is building their 6th plasma assembly line, seems to feel they can stay competitive on volume and pricing. The company has taken the lead in annual production from Samsung, and although overall plasma shipments declined in the first quarter of this year, Panasonic still held the lion’s share of that business with 31% of the market.

So, what lies ahead? Today’s flat-panel HDTV and monitor business is driven by high manufacturing volume, aggressive pricing, and (perhaps most importantly) distribution channels. Pricing flat panel displays at the high end of the market is not a wise strategy in this day and age. Plasma (and LCD) sales are essentially driven by three factors — screen size, resolution, and price.

If you can make enough product, you can also get it onto store shelves with market-sensitive pricing. LG, Panasonic, and Samsung are in a strong position to do that, while Hitachi and Pioneer aren’t — otherwise, they would also be adding PDP manufacturing capacity. It may well turn out that a round of consolidation is in order for the plasma business over the next two years as PDP technology continues to lose ground to LCD below 50 inches.

This article appears in the July 2007 issue of Pro AV magazine.

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LG to Halt Some Plasma Output; Eyes Reform
21 May 2007

SEOUL, May 18 (Reuters)—LG Electronics said it is to halt production at the smallest of its three plasma panel lines before the end of next month, a move analysts see as a step towards a broader restructuring of the loss-making unit.

The world's No. 2 maker of plasma panels said in a statement on Friday it was considering several strategic options to "efficiently adjust the plasma display business."

It did not elaborate, but said details of the new strategy could come within several months.

Dismal PDP (plasma display panel) screen results wiped out booming mobile phone earnings at LG, which posted a January-March net loss of 122.6 billion won. Its display division, which makes plasma panels, flat-screen TVs and monitors, posted an operating loss margin of 16 percent.

"LG needs to show some improvement in the PDP performance if they want to go ahead with options such as forming a joint venture or an alliance with other makers," said Greg Roh, an analyst at Korea Investment & Securities.

"By stopping the smallest line and focusing on 50-inch plasma panels, LG should be able to cut losses."

Roh expected operating losses from LG's display division to narrow to around 40 billion won in the third quarter from an estimated 100 billion won in the current second quarter, following the partial production halt.

LG trails Japan's Matsu****a Electric Industrial Co. and is ahead of Samsung SDI Co. in the plasma business.

Shares of LG Electronics closed up 1.32 percent at 69,000 won, against the wider market's 0.2 percent dip. Samsung SDI rose 0.54 percent to 55,900 won.

LG said the move would cut its plasma production capacity by 16 percent and could save 20-30 billion won ($22-33 million) in costs.

The production line has a monthly capacity of 70,000 units of 42-inch plasma display panels (PDPs). The two other larger lines have 120,000 and 240,000 units of monthly capacity.

An LG spokeswoman declined to provide further details.

Losing market to LCD

Plasma screens, which once dominated the 40-inch-and-larger TV market with cheaper price tags and technical advantages, have been pummelled in a price war with liquid crystal display (LCD) screens backed by larger production lines and economies of scale.

Some analysts fear plasma makers are now on the verge of becoming niche market players.

In March, while denying rumours it was pulling out of the plasma market, Dutch electronics giant Philips said that over time LCD would "become the dominant flat panel TV technology".

LG's CEO said last month the company may have to withdraw from some areas, although he played down talk about a possible sell-off or shutdown of the plasma display operation.

LG's move stands in contrast to Samsung SDI, which on Monday told Reuters it was hoping to turn to a profit in the fourth quarter, helped by growing demand. Samsung SDI expected the average retail price of plasma TVs to fall 20-30 percent this year, although slower than last year's 35 percent drop.

Analysts say plasma makers have no clear strategy but to wait for the industry standard to move to the 50-inch-and-bigger category, where PDPs are expected to remain cheaper than LCDs for the next 2-3 years.

($1=927.9 Won)

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PDP Makers Struggle to Reclaim 40-Inch Market
29 May 2007













LCD panels have been gaining share in the 40-inch market, traditionally the stronghold of the PDP. Matsu****a Electric Industrial, and other PDP TV makers, must decide how best to respond.

The very shape of the large-screen flat panel TV market is changing, as the shipment volume of liquid crystal display (LCD) panels begins to surpass shipments of plasma display panels (PDP) for 40-inch class screens (Fig 1) from 2006 to 2007.

According to a survey by DisplaySearch of the US, the shipment volume of 40-inch class LCD panels in 2006 (including public use) was over 8 million, still slightly below the 9.8 million PDPs shipped. The firm forecasts that LCD shipments will pull ahead in 2007, however, to reach 16.9 million vs 13.7 million for PDPs. Displaybank Co Ltd of Korea believes that the switch in market leader has already occurred, in 2006, counting 7.8 million 40-inch class LCDs shipped and only 7.4 million PDPs.

PDP TVs essentially monopolized the 40-inch class segment of the flat panel TV market for years, and it has been the largest PDP market. Matsu****a Electric Industrial Co Ltd of Japan has driven the PDP market, and has said numerous times that panels of 37 inches or larger are PDP, and 32 inches or smaller are LCD.

A look at the market today, however, shows an abrupt invasion of the 40-inch class market by LCD TVs, and the PDP companies are being forced to make a key decision for the future.

The transformation began in about summer 2006. A survey of monthly shipment volumes by Displaybank showed that from July to August of that year, shipments of 40-inch class LCD panels exceeded PDPs for the first time (Fig 2).

Part of the reason for this development was that a number of new fabs came online, including a 7th-generation plant by S-LCD Corp of Korea, the joint venture between Samsung Electronics Co Ltd of Korea and Sony Corp of Japan, and Kameyama No. 2 Plant of Sharp Corp of Japan, an 8th-generation facility. These moves provided a major increase in the supply level of 40-inch class LCD panels while simultaneously dramatically slashing the cost difference to PDPs, which have been steadily dropping in price. At companies manufacturing PDPs, like Samsung SDI Co Ltd of Korea and LG Electronics Inc of Korea, explained DisplaySearch, "The shift to LCDs in 40-inch class sets by TV manufacturers, their major customers, triggered the abrupt growth in LCD panels." Samsung SDI, for example, was thought to have been supplying panels to Koninklijke Philips Electronics NV (Royal Philips Electronics) of the Netherlands, which switched from PDP TVs to LCD TVs.

When it comes to things like display performance and price, PDP TVs are fully the equal of LCD TVs, and in fact they have the advantage in specs like moving picture display performance or contrast ratio in dim lighting. Even so, said DisplaySearch, LCD TVs are taking the lead in the 40-inch class market for several reasons: "There are more LCD TV brands, or manufacturers, than for PDP TVs, which means more items on the selling floor, and a larger selling area. Now that Sony and Samsung Electronics, the two top TV brands worldwide, are pushing LCD TVs, the promotions (primarily in the US and other nations) are affecting the entire market."

Performance under Plan

As a result of these developments, PDPs had a very tough second half in 2006. An analysis of shipments by DisplaySearch puts shipment volume in the fourth quarter of 2006 at about 2.7 million units, down 4% from the prior quarter. It was the second time in four years that shipment volume dropped below the prior quarter. The shipment volume of 2.7 million units was 15% below PDP manufacturer forecasts, and 9% below DisplaySearch forecasts. The unit price also dropped by 7% from the prior quarter, to US$670, setting a new low.

Displaybank data also pointed out that PDP is facing an uphill battle. Revenues from 40-inch class PDPs in December 2006 dropped under those of 50-inch class designs for the first time. Shipment value of 50-inch class products has been flat for several months on either side of December 2006, indicating that the shipment value of 40-inch class PDPs - their largest market - is dropping.

It is well known in the industry that Matsu****a Electric Industrial slashed the price of its 42-inch high-definition TV (HDTV) capable set from US$1,799 to only US$999 for the Christmas shopping season in the US. As one display engineer said, reflecting a common opinion in the industry, "It was a shot in the arm for slumping PDP TVs."

Hike in Production Volume

The 40-inch class market is not only the largest market for PDPs, but is also expected to experience major demand growth for the flat panel TV market. LCD TVs seem likely to supply the majority of the market, along with expected strong demand from the market for panels of about 30 inches.

For PDPs to remain a major contender in flat panel TVs, it will have to maintain a shipment volume on a par with that of LCD panels in the 40-inch class - the main battlefield. Sheet volume is a crucial factor in maintaining cost competitiveness, but also in things like capturing new brands and securing sales floor space.

Matsu****a Electric Industrial has made it clear it is pursuing increased shipment volume. In January 2007 the firm announced it would invest Yen280 billion into a new plant in Japan, its fifth manufacturing facility. Production capacity is expected to be 12 million TV sets (42-inch equivalent) annually, which is more than the 11.1 million sets the other four fabs achieve combined.

The firm is also aggressively pursuing cost reduction, installing production equipment to cut ten 42-inch panels from a sheet. The current state-of-the-art facility is the No. 4 Plant, which cuts eight panels. Matsu****a Electric Industrial believes that the new facility will reduce fixed manufacturing cost per unit (42-inch HDTV-capable) to about 20% that of the No. 1 Plant (Fig 3).

Competitors Wary

If the trend accelerates and all the PDP manufacturers begin beefing up their production stances, it would not be impossible to find a way for PDP to take back the leading position, but at present Matsu****a Electric Industrial is battling alone. The other PDP manufacturers have begun to announce "wait-and-see" policies on further investment.

In January 2007, Pioneer Corp of Japan announced a freeze on plans to build a new PDP fab on a site in Yamanashi Prefecture which it had already acquired for the purpose. Hitachi Ltd of Japan decided to put off its decision on whether to begin construction of a new plant until around the end of 2007.

It's impossible to deny the poor growth in the sector over all, which is making it tough to cut costs, too. PDP manufacturing is capital-intensive, on automated manufacturing lines with minimal human intervention, making the pursuit of volume scale essential. The most direct route to reduced cost is a horizontal extension, sharing equipment and materials as much as possible to reduce fixed expenses.

The ratio of full-spec HDTVs (1920 x 1080 pixels) is expected to increase worldwide in the near future, but PDPs face a number of challenging technical issues before they can achieve full-spec HDTV display. DisplaySearch warns, "The price of an LCD only has to be boosted by 5% or 10% to be able to display HDTV imagery, but the price hike for PDPs will be 20% or 30%." As the global market moves toward full-spec HDTVs, the need for further cost reductions will rise even higher (Fig 4).

Three Scenarios

Judging from the general opinion among experts in the field and industry observers, whether or not PDPs remain a major panel choice for flat panel TVs depends on future decisions made by Matsu****a Electric Industrial, which has stated for years that PDP is the best choice for 37-inch and larger.

Broadly speaking, Matsu****a Electric Industrial has drawn up three scenarios. If the firm continues to hold its original position that 37-inch and larger should be PDPs, then it will have to fight it out with makers of LCDs in the 40-inch class - the main battlefield. In this case there are two possible options available to Matsu****a Electric Industrial, namely (1) it can continue solitary investment, achieving cost reductions through increased production scale, or (2) it can enter cooperation with other PDP manufacturers to reduce cost through cumulative increases in production scale. One industry source suggested (2) as the optimal approach, claiming that with (1) there are limits to how far a single manufacturer can go. The source urged rapid tie-ups in areas that can be shared with other companies.

It is also possible, however, that Matsu****a Electric Industrial may change its position about using PDP at 37 inches and above, in which case it could maintain its brand name strength by securing share as a TV manufacturer, not as a PDP manufacturer. In this case, the firm could take a flexible middle course, selling 40-inch class TVs in both LCD and PDP varieties even as LCD enjoys a rising market share. This is a 3rd choice for Matsu****a.

LCD panels for 32-inch and smaller TVs are supplied by IPS Alpha Technology, Ltd of Japan, a joint venture of Hitachi and Toshiba Corp of Japan. IPS Alpha Technology is currently using a 6th-generation fab, which is ill-suited to the manufacture of 40-inch class panels. Both capitalizing firms would have to agree on additional investment to construct a new, large-scale plant for efficient manufacture of panels for 40-inch class TVs. The industry is rife with rumors, such as whether or not they will acquire LG.Philips LCD Co Ltd of Korea, which holds the biggest chunk of the LCD panel market but is experiencing serious financial difficulties. LG.Philips LCD has a 7th-generation plant capable of manufacturing 40-inch class LCD panels, and technology to make panels using the in-plane switching (IPS) technology that Matsu****a Electric Industry has praised in the past.

At a management press conference held by Matsu****a Electric Industrial in January 2007, president Fumio Ohtsubo explained, "We are aiming to capture 25% share of the flat panel TV market for 37-inch and larger in fiscal 2009" - up from the 19% share in fiscal 2006. His comment was a modification of the firm's original announced target of 40% of the PDP share for 37-inch and larger TVs.

His comment can be taken two ways, though. One interpretation is that now that LCD TVs are selling better in the 37-inch and larger class, the significance of holding market share in the PDP market has faded, and the company is focusing on market share within the entire flat panel TV market instead. The other interpretation is that the firm is adopting a flexible approach and may use either technology for 37-inch and larger TVs.

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Plasma Leader Reaches Out To Stave Off Dwindling Share From LCDs
1 June 2007

Market leader Matsu****a Electric Industrial Co. (Panasonic) and Hitachi Ltd. announced Thursday an agreement to supply each other with giant plasma panels for televisions. Starting in fiscal 2007, Matsu****a will supply Hitachi with 103-inch panels, and in fiscal 2008, Hitachi will reciprocate by supplying Matsu****a with 85-inch panels.

Just such a horizontal partnering arrangement was one of the recommendations of an analysis I wrote in the June issue of Projection Monthly with Flat Panel Coverage. The handful of remaining plasma suppliers are facing eroding market share from LCD-TV suppliers.

But for PDPs to remain a major contender in flat panel TVs, it will have to maintain a shipment volume on a par with that of LCD panels in the 40-inch class - the main battlefield. Sheet volume is a crucial factor in maintaining cost competitiveness, but also in things like capturing new brands and securing sales floor space.

PDP has seen its strength in the 40-inch segment challenged recently. As has been reported, PDPs slightly out-shipped LCDs in the 40-inch range in 2006, but that will change in 2007. Momentum is with LCDs as consumers appear to be favoring them over PDPs.

Part of the reason was that a number of new LCD fabs came online over the last year including a 7G plant by S-LCD and an 8G fab from Sharp, which flooded the market and pushed down prices. The other reason is the rapid adoption of 1080p - something LCD has and PDP is just now starting to offer.

While competition in the 40-inch range is critical, it is not clear the PDP makers are committed to the fight. Many are refocusing on larger screen sizes, but historically, volumes decrease above the 50" range, so this strategy may push them out of the mainstream screen sizes. And, they must have the capital to invest and compete.

Fortunately, PDP suppliers can expect rapid 1080p growth in Q2′07, as Matsu****a ramps sizes including 42, 50, 58, 65 and 103 inches. All other major plasma suppliers are now shipping 1080p panels.

But going to 1080p will cost 20 to 30% more for PDPs, compared to only 5 to 10% for LCDs. As the global market moves toward Full HD, the need for further cost reductions will even greater if PDP hopes to survive.

Matsu****a has made it clear it is pursuing increased shipment volume. In January 2007 the firm announced it would invest ¥280B into a new plant in Japan, its fifth manufacturing facility. Production capacity is expected to be 12M TV sets (42-inch equivalent) annually, which is more than the 11.1M sets the other four fabs achieve combined. The firm is also aggressively pursuing cost reduction, installing production equipment to cut ten 42-inch panels from a sheet.

If the trend accelerates and all the PDP manufacturers begin beefing up their production stances, PDPs could take back the leading position. But Pioneer is treading water, Hitachi has decided to put off the decision on construction of a new factory until fiscal 2008, Funai Electric Co. has gotten out of plasma TVs altogether, and LG Electronics is closing inefficient PDP lines. So that leaves only Matsu****a as the main leader so far.

So is sharing and consolidation an answer? Matsu****a and Hitachi originally agreed to a comprehensive partnership in the plasma panel business back in February 2005. The idea was to collaborate on development, production, marketing, and the handing of intellectual property rights. But so far, the only fruits of that agreement have been the establishment of a joint company to manage IP and the adoption of 1.8mm glass sheet for panel production.

Now, in addition to agreeing to supply one another with giant plasma panels, the two companies will look for ways to further deepen their relationship, such as through the sharing of main components and materials.

With a 30% share of the global market for plasma TVs, Matsu****a is the clear winner in this field. But there is danger in going it alone, because the parts and materials makers want to be able to benefit from economies of scale. By partnering with Hitachi to share giant panels, Matsu****a aims to guarantee a market for these producers.

Either way, we see the domain of PDP-TV retreating to larger sizes and smaller market share, after a temporary rebound in the second quarter of 2007, despite Matsu****a’s sole efforts to stem the tide.

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Asahi Glass to Build Second LCD Glass Substrate Plant in Gumi, Korea
27 June 2007

Asahi Glass plans to invest 15 billion yen (about $121 million) to construct its second LCD glass substrate plant in Korea. At the same time, Asahi Glass also decided to suspend production of PDP glass substrates at its Aichi plant, central Japan, from next month, and instead, it will place an emphasis on automobile glass production. This movement seems to take into account the latest market trend of demand for LCD TVs exceeding that for PDP TVs at a rapid pace. The new LCD glass factory will be built as early as next summer adjacent to a plant in the city of Gumi, and will be able to produce 5 million square meters of glass substrates per year.

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LCD set to exceed plasma in flat panel TV sales
3 July 2007

Demand for flat-panel televisions larger than 37 inches is set to swing overwhelmingly in favour of liquid crystal display televisions rather than plasma TVs, the rival technology, according to a senior executive at Sharp.

Hirotsugu Terada, the head of Sharp's audio/video group, forecast that sales of large LCD TVs in Japan would reach 1.1m units in the half year from October to March 2008, compared with 478,000 units for plasma televisions.

In the past, observers assumed that plasma televisions would trump LCD TVs over 37 inches, as they are cheaper to manufacture and the picture quality was thought to be superior. But significant advances in LCD panel manufacturing efficiency, coupled with dramatic improvements in picture quality, are leading more consumers to choose LCD panels over plasma.

Although Matsu****a Electric, better known as Panasonic, has announced plans to double production of its plasma display panel output capacity within two years, smaller players in the market have been suffering due to severe price competition. LG Electronics, the world's second-largest PDP maker after Matsu****a, is struggling to reduce heavy losses at its PDP business. Recently, LG quietly halted production at one of its three domestic PDP lines as part of a restructuring.

Sharp, a leading maker of LCD TVs, expects global sales of its televisions to grow by 50 per cent to 9m units this year, up from 6m units last year. The company has already doubled production at its second factory in Kameyama, Japan, to 60,000 panels a month from 30,000 panels in January. Next year, ahead of the Beijing Olympics - a key event that will boost TV sales - Sharp plans to ramp up production to full capacity of 90,000 panels a month.

Sharp yesterday launched what it called the "thinnest" LCD TV ever, measuring just 8.1cm in screen sizes ranging from 26-52 inches. The Aquos-brand TVs will debut in Japan next month and in overseas markets by the end of the year, in time for the crucial holiday shopping season.

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Rise of the LCDs hits Panasonic
6 July 2007

The relentless increase in size, and decrease in price, of LCD display panels is proving a significant challenge for Matsu****a.

Better known under its Panasonic brand name, Matsu****a is the leading manufacturer of the only existing alternative large flat display technology, the plasma display panel.

Until recently, plasma screens enjoyed a comfortable position at the top of the flat screen TV market because the intrinsic brightness and large pixel size of the technology lends itself to large format screens of 50in or more.

LCDs were originally suited only to smaller, higher resolution screens owing to their small pixel size and need for even backlighting.

However, rapid advances in LCD and backlight technology mean that LCD TVs now account for more than 50 per cent of large TV sales, according to analysts at Nomura Securities. The biggest LCDs on the market now exceed 70in.

"Matsu****a is bound to see its status as a TV maker dwindle further if it remains limited in its commitment to the LCD market," said Nomura analysts in an investment report today.

"While we think that 2007 will be easier than 2006, as Matsu****a has introduced full-high-definition PDP TVs, the commoditisation of LCD TVs in the 40in to 45in range has been faster than expected.

"It now seems necessary to assume the worst-case scenario when it comes to discounting for 50in plasma display panel TVs."

Based on these concerns over the display panel market, Nomura today lowered its investment advice on Matsu****a from 'buy' to 'neutral'.

Matsu****a has also yet to find a purchaser for or otherwise resolve its problematic links to loss making subsidiary JVC, Nomura noted.

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Plasma, LCD TV Shipments in Asia-Pacific to Surpass 11 Mn Units in 2007
16 July 2007

Shipments of plasma and LCD TVs in Asia-Pacific (excluding Japan) reached close to 6.9 million units in 2006. IDC expects continued growth in 2007 as the region surpasses 11 million units, representing growth of about 61% year-on-year.

Growth in China is expected to be especially robust over the next two years as the country prepares to host 2008 Beijing Olympics. Positive sentiments and heavy vendor promotions leading up to the event will ramp up sales. TV makers are also preparing for strong demand ahead as they set up more domestic plants. Elsewhere in the region, supply will continue to expand as panel production at the newer-generation 7.5G and 8G plants ramp up in end-2007 and 2008.

LCD TVs enjoyed strong growth in Taiwan last year thanks to steep price cuts. In Hong Kong, robust demand from hotels and other property developments also helped LCD sales. In most markets including Singapore, Malaysia, and Hong Kong, the World Cup proved disappointing for vendors while the effects of the Lunar New Year and year-end sales were much more encouraging. In Australia, consumer sentiments towards LCDs brightened as the form factor's picture quality improved and prices fell.

Plasma TV fared much poorer than its LCD counterpart in 2006 due to the steep price cuts implemented for the latter in the second half of 2006. The media hype over HD last year also heavily favored LCD TVs, as most plasma models did not come with high-definition resolutions. IDC is forecasting a 35% CAGR for LCD TVs and a 7% CAGR for plasma TVs over the 2007-2011 period.

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Samsung SDI posts loss on falling PDP prices
20 July 2007

SEOUL (Reuters) - Samsung SDI Co., the world's third-largest plasma display panel (PDP) maker, posted a worse-than-expected quarterly net loss on Friday, hurt by tumbling prices of its television screens.

Results at the South Korean firm, which sells both PDP screens and traditional cathode-ray tubes (CRT) for TVs, are unlikely to improve significantly soon as the sectors will continue to see weak pricing and margins.

Samsung SDI posted April-June net loss of 138.1 billion won ($150.9 million), missing a consensus forecast for a 48.5 billion won loss by nine analysts polled by Reuters Estimates.

The figure compares with a 30.3 billion won net profit in the second quarter of last year and with the previous quarter's 77.2 billion won net loss.

Sales came in at 861.7 billion won, lower than a forecast for 935.5 billion won and against 1.23 trillion won a year earlier.

Samsung SDI posted an operating loss of 133.1 billion won, against expectations for a 60.7 billion won loss. It said operating loss margin widened to 15.4 percent from a 12.6 percent loss in the first quarter.

Its PDP shipments rose 15 percent from the first quarter but losses from the division widened due to falling prices, Samsung SDI said. It expected a slower fall in plasma screen prices in the second half.

Samsung SDI was the world's top producer of PDPs in 2005, but has been overtaken by Japan's Matsu****a Electric Industrial Co. and home rival LG Electronics Inc. last year as it grappled with reduction problems and declining sales.

PDPs have essentially lost a bruising price battle with LCD screens in the 40-inch-and-larger flat-screen category, and their only hope hinges on a quick shift of consumer preferences for the 50-inch and larger TV category.

On Thursday, LG Electronics said it recorded a 24.2 percent second-quarter operating loss margin in its display division, wider than a 16 percent loss in the previous period, as plasma panel prices continued to plummet.

Samsung SDI said its shipments of CRT grew 6 percent while mobile display shipments fell 8 percent as global handset makers increasingly focus on low-cost phones.

Shares of Samsung SDI, which has a market value of $3.3 billion, rose 1.19 percent to 68,000 won at 0455 GMT, compared with a 1.52 percent gain in the main KOSPI index. The stock fell 1.7 percent in the second quarter while the KOSPI rose 20 percent.

($1 = 915.4 Won)

--------------------------------------------------------------------------------------------------

Shopping for a Big-Screen TV? Think LCD
23 July 2007

Good-bye, plasma; hello, LCD: The HDTV tide is turning, and LCD is rising to the top.

I've always had a soft spot for plasma TVs. There's something soothing about sitting in a dark room with a bowl of popcorn, enveloped in the deep blacks and rich colors of a plasma panel. In contrast, LCD screens have always appeared washed out to me, much like computer displays--the antithesis of soothing.

Such feelings may soon qualify as nostalgia. This past year, LCD has been kicking plasma's heinie, and it may eventually boot plasma out of the consumer market.

LCD Surge

Last fall LCDs outsold plasmas in the sweet spot of the market--40-to-44-inch panels--for the first time ever, according to DisplaySearch. Part of that is due to aggressive pricing by LCD manufacturers: The cost of big flat panels has dropped 30 to 40 percent annually for the past two years, says Chris Chinnock, president of research firm Insight Media.

But it's also because LCD quality has been catching up to plasma's and may soon surpass it. While plasma's physical constraints mean makers are struggling to produce affordable 1080p panels below 50 inches, LCDs of that size have been doing full-resolution HD for over a year. The two big knocks against LCDs--that fast action tends to blur, and that colors aren't rich enough--should disappear in rapid fashion.

This year such manufacturers as Philips and Sharp began shipping LCDs with refresh rates of 120 Hz--twice the usual rate--to eliminate the blur effect. Roughly one out of ten LCD sets sold this fall will run at 120 Hz, says Eddie Taylor, VP of TV research for DisplaySearch.

Both LCD and plasma will also benefit from "Deep Color," part of the HDMI 1.3 standard that provides a far richer palette with higher levels of contrast. TVs with HDMI 1.3 connections were scarce last year, but should be easier to find now. Next year we'll begin to see LCDs that use LEDs for backlighting instead of fluorescent lights, allowing them to produce even more vibrant colors, says Jon Peddie, founder of Jon Peddie Research.

One thing you probably won't see this holiday season? More dramatic price drops. LCD supplies will be tight, and profit margins are already razor-thin. But you still should be able to find brand-name, 42-inch, full-resolution panels for under $2000.

Get the OLED Out

So from now on you'll buy LCD flat panels--right? Not exactly.

A couple of other technologies just might entice you. One is Organic Light Emitting Diodes--a wafer-thin, superbright technology that employs light-Producing polymers instead of backlit liquid crystals. Sony showed off a 27-inch OLED set at a trade show last year and plans to ship an 11-inch screen in Japan this year. We don't know exact prices yet, but everyone expects the sets to be ridiculously expensive. Mark Fihn, publisher of the Veritas et Visus newsletter on display technology, predicts it will be five years before we'll see big-screen OLEDs on U.S. store shelves, due to high manufacturing costs.

Don't count out DLP rear projection, either. It remains the most affordable alternative above 55 inches--and it has a few tricks up its sleeve. Fihn says Samsung is shipping DLP sets that can produce a startling 3D effect by switching rapidly between left and right images.

Once studios begin producing stereoscopic content--most likely Blu-ray and HD DVD flicks--you may find yourself wearing a pair of silly glasses while watching King Kong II in 3D.

And that will be something to see.

--------------------------------------------------------------------------------------------------

LCD sales holding strong, plasma sales sinking lower
24 July 2007

Even though Matsu****a joined forces with Hitachi to take on the less-than-favorable plasma market, things (still) aren't looking good in terms of sales figures. According to recent reports, PDP makers on the whole "are likely to report weak results, having lost dominance of the market for large TVs to the more popular LCD." Additionally, Samsung already posted a "worse-than-expected quarterly net loss, hurt by tumbling prices of its television screens." On the flip side, LCD producers are more likely to be holding their heads high, as sales of these sets has continued to be strong regardless of how far the prices are falling. If you're scratching your head because you thought that people preferred plasmas over LCDs, we can only assume that regardless of predilection, money talks.

--------------------------------------------------------------------------------------------------

Is Matsu****a Losing Its Mojo?
25 July 2007

Despite a first-quarter profit gain, the company's long-term outlook for plasma TVs is threatened by the rival LCD flat-screen technology

Has Matsu****a Electric Industrial's growth engine started to sputter? It's a question that a growing number of financial analysts are asking about the company's TV business, and CEO Fumio Ohtsubo will be hard-pressed to come up with answers.

On July 25, the Japanese technology giant reported first-quarter profit gains for the sixth straight year. But that was almost an afterthought to bad news a day earlier, when the company revised downward its forecast for full-year earnings after announcing the sale of part of its stake in ailing Victor of Japan (JVC). The revision spooked investors and triggered a sell-off that left the company's shares 3.6% lower.

Among the biggest worries: lower-than-expected flat-screen TV sales in North America. Ohtsubo himself had expressed concern earlier this year that plasma TV makers were forfeiting ground in the face of a marketing blitzkrieg from liquid-crystal displays, the rival flat-panel technology. That observation from the man whose company has one-third of the global plasma TV market now seems prescient.

Yen's Weakness Helps

Of course, nobody thinks plasma is about to get ousted completely by LCDs. Plasma producers still rule in big-screen TVs because they can make large panels at a lower cost than LCD producers can. But the market outlook doesn't seem as sunny as Matsu****a had hoped, and LCD makers are quickly closing in.

In the fiscal first quarter, Matsu****a's operating profit rose 13%, to $615 million, despite a modest 5% gain in sales, to $18.6 billion. Strong sales of digital cameras, video cameras, DVD recorders, and household appliances, along with the yen's weakness, were behind the gains (see BusinessWeek.com, 2/1/07, "Matsu****a's Wary Plasma Dominance"). But full-year profit and sales forecasts were revised down 5%, to $3.97 billion, and $73.1 billion, respectively, due to the accounting change after Matsu****a issues $290 million worth of JVC shares to Japanese consumer electronics company Kenwood (KNWCF) and Kenwood's biggest shareholder, the Sparx Group, a fund.

At first glance, the TV business doesn't look bad. From April to June, Matsu****a sold 800,000 plasma TVs, a 31% improvement over the 610,000 sets it sold in the same three-month period last year. Overall flat-panel TV revenues were up 2% as well. But the company needs to pick up the pace if it's to reach its target of shipping 5 million sets this year—a 43% gain from 3.5 million.

'On Track' for Targets

Another troubling trend: a fall in first-quarter TV revenues in Japan and North America. Matsu****a's chief financial officer, Makoto Uenomura, blamed competitive prices, and said prices had fallen 29% in the quarter from the same period a year ago. But Uenomura said he was confident Matsu****a was "on track" to hit its targets, and dismissed rising inventories. "We're just switching to a new lineup of high-definition TVs in Europe and the U.S. so the inventories you're seeing are new products, not old," Uenomura told reporters. "We're not worried."

Maybe they should be. Even before Matsu****a's first-quarter numbers were released, some analysts had already lowered their volume sales estimates. Morgan Stanley, for one, challenged Matsu****a's forecast that the global plasma TV market would expand to 12.5 million sets this year, from around 9.7 million in 2006. The brokerage has global plasma TV sales at between 10 million and 11 million.

--------------------------------------------------------------------------------------------------

DisplaySearch Reports LCD TV Panels Enjoyed Record Quarter in Q2'07, Doubled Up on PDPs at 40"+ as Plasma Sales Remained Weak
31 July 2007



40"+ LCD TV and Plasma TV Panel Shipment Results


AUSTIN, TEXAS, July 31, 2007—DisplaySearch, the worldwide leader in flat panel display market research and consulting, reported in its latest Quarterly PDP Module and TV Shipment and Forecast Report and Weekly TV Flash Report that plasma and LCD TV panel sales were headed in opposite directions in Q2'07.

LCD TV panel shipments enjoyed a record quarter in Q2'07, rising 32% Q/Q and 65% Y/Y to 19.6M panels. The Q2'07 results exceeded suppliers' expectations and DisplaySearch's forecast by over 700K panels or 4%. Revenues grew 28% Q/Q and 39% Y/Y to a record $7.2B. ASPs were only down 2% Q/Q and 16% Y/Y to $369. For the first time, twice as many 40"+ LCD TV panels were shipped as 40"+ plasma panels, as shown in Figure 1. The LCD TV share of the 40"+ flat panel market rose from 42% in Q2'06 to 68% in Q2'07. This can be attributed to the amount of optimized Gen 7 and larger LCD fab capacity brought online, to the success of LCD TV brands and retailers in getting consumers excited over 1080p TVs where LCDs have dominated PDPs and to the greater number of LCD TV brands overwhelming plasma TV brands in retail.

Of the total LCD TV panel shipments, the 40"+ share rose from 22% in Q1'07 to 23% in Q2'07 and the 1080p share of all LCD TV panel shipments rose from 10% to 11%. Not all larger sized categories increased share in Q2'07; the 45-47" category fell from 5.0% to 4.7% as prices remained too high for most consumers. 32" remained the dominant size category, earning a 38% share with OEMs and brands likely buying more 32" panels than they needed as 32" panel prices have been rising. LPL remained #1 on a unit basis followed by AUO and Samsung. On a revenue basis, Samsung remained #1 followed by LPL and AUO.

Plasma panel shipments were flat Q/Q and down 4% Y/Y to 2.3M panels. Year to date, plasma panel shipments are down 3% despite a 51% increase in capacity. Plasma panel manufacturers were expecting an increase of 18% to 2.7M panels, so clearly Q2'07 was disappointing. With plasma panel prices falling rapidly, plasma panel revenues were down 13% Q/Q and 37% Y/Y to $1.2B. ASPs were down 13% Q/Q and 34% Y/Y to $507.

Despite the overall PDP decline, there was growth at 50"+ and rapid growth in 1080p panels. The 50"+ share of PDP panel shipments continued to increase, rising from 29% in Q1'07 to 31% in Q2'07 on an 8% Q/Q increase and is expected to reach a 34% share in Q3'07 as PDP suppliers continue to shift their focus to larger sizes due to 42" share losses to LCDs. There was also a dramatic increase in 1080p panel shipments, up 545% to 169K panels with 1080p penetration rising from 1.1% to 7.3%. The increase in 1080p shipments and improved supply should improve their competitive position against LCDs.

Matsu****a remained #1 with Samsung SDI overtaking LGE for #2 as shown in Table 1. Of the five major suppliers, only Matsu****a and Samsung SDI enjoyed Y/Y growth. By size, Matsu****a led at 37", 42", 55-59" and 60"+ while Samsung SDI led at 50". 1080p panels accounted for an impressive 17% of Matsu****a's mix, up from just 2% in Q1'07.

Looking forward, PDP suppliers are expecting over a 30% Q/Q increase to over 3M panels in Q3'07. In order for this to happen, we would expect to see PDP TV brands make significant price moves within the next 60 days.

--------------------------------------------------------------------------------------------------

Pioneer Posts Favorable Car Electronics Sales, Yet Sluggish Plasma TV Sales
2 August 2007

Pioneer Corp. has announced its consolidated financial results for the first quarter (1Q) of FY2007. Sales declined 4.7% year-on-year (YoY) to 182.6 billion yen, and operating income also dropped 81.3% YoY to 1.3 billion yen.

The company, however, does not change its estimates of 835 billion yen sales and 15 billion yen operating income for the full term.

By business segment, the car electronics segment saw 1Q operating income increase by 100 million yen YoY to 7.6 billion yen. In contrast, the home electronics segment saw operating losses expand by 4.9 billion yen YoY to 5.4 billion yen, falling below the company's estimate released at the beginning of the fiscal year.

Pioneer attributed the segment's stagnant result to a lower income margin of PDP TVs that account for 34% of overall home electronics segment sales.

PDP TV unit price anticipated to rise 3%

Along with intensified competition in the thin-panel TV market, the unit price of the company's PDP TVs lowered 13% quarter-on-quarter (QoQ). For the full term, however, the company indicated a view that the unit price will increase 3% reflecting its product portfolio, in which high price range full HD models constitute 20% of its overall PDP TV models and 50- to 60-inch class large screen products' ratio will rise.

Given uncertain trends in European and U.S. markets, however, "We are not optimistic," Pioneer said.

--------------------------------------------------------------------------------------------------

Report: Plasma screen sales to decrease from 2009
9 August 2007

SEOUL, South Korean — Plasma display makers, facing intense competition from liquid crystal displays (LCDs), will likely see their panel revenue start declining from 2009 on falling prices, U.S. research firm iSuppli Corp. said.

Global plasma display panel (PDP) revenue will rise to $8.6 billion this year, up 12 percent from 2006, and reach a peak of $10.2 billion in 2008, iSuppli said in a report dated Thursday.

But annual plasma revenue will then contract to $8.7 billion by 2011, despite growing unit shipments, as makers slash screen prices due to competition with LCD and other technologies.

Supply has been tight in the PDP market as many manufacturers scaled back production earlier this year under the onslaught of LCD televisions. After losing a price battle with LCDs in the 40-inch-and-larger TV market, plasma makers' hopes hinge on a shift of consumer preferences to the 50-inch and larger TV sets.

Japan's Matsu****a Electric Industrial Co. is the world's biggest maker of PDPs with a 31.5 percent market share in the first quarter, followed by South Korean rivals LG Electronics Inc. and Samsung SDI Co.
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post #2 of 303 Old 04-11-2007, 01:39 PM
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Don't care. I already have my 60" plasma which looks better than LCD and will last me for about 5-10 years. By then, maybe LCD will look as good as plasma does today, or OLED will be out and look as good or better.

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I'm still gonna buy another plasma... they just look better than lcd's imho
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post #4 of 303 Old 04-11-2007, 01:48 PM
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I'm still gonna buy another plasma... they just look better than lcd's imho

It's not just your opinion, it's a fact!

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This thread should be moved to the "Flat Panel General & New FP Tech Forum" IMO.
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post #6 of 303 Old 04-11-2007, 01:49 PM
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Don't care either. Still going to buy a pioneer plasma this year. Still is the best tv out there.
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post #7 of 303 Old 04-11-2007, 01:51 PM
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This thread should be moved to the "Flat Panel General & New FP Tech Forum" IMO.

Done.
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Bigger cheaper displays - what's not to like.

It's just my opinion & it's worth exactly what you paid for it.
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Don't care...plasma is better.

I ride a mountain bike with 29" wheels. Niche market, but far, far better than the mainstream 26" wheels. Why is that relevant? Because if you want the best, who cares what all the lemmings do...
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LCD overtakes plasma in 37-inch TV segment; now to the 42-inch segment

18 August 2005.

You know what they say: old news is no news... just who is buying those teeny tiny TVs anyway?
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Don't care...plasma is better.

I ride a mountain bike with 29" wheels. Niche market, but far, far better than the mainstream 26" wheels. Why is that relevant? Because if you want the best, who cares what all the lemmings do...


They were all buying plasma because the price of a large LCD was prohibitive. And quality in HD was lagging in LCD. Times have changed.

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Don't care. I already have my 60" plasma which looks better than LCD and will last me for about 5-10 years. By then, maybe LCD will look as good as plasma does today, or OLED will be out and look as good or better.

Couldn't agree more, if plasma ever does die than I will just get OLED or SED or whatever new is out there. I will never go back to lcd for tv viewing, although they are great for computer monitors
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Done.




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Look at the size guys, Panasonic is the only manufacturer who makes a 37" and they only have 2 models. Of course LCD is going to sell more.

Exactly.
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I wonder how this will affect the price of the new Pioneer 60" 1080p Elite. It has been estimated it might have a msrp of 10k. From this info this might be an over kill price even if it suppose to be the best plasma on the market.
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Still doesn't make their picture better. But hopefully will help lower the prices of plasma.
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Don't care...plasma is better.

I ride a mountain bike with 29" wheels. Niche market, but far, far better than the mainstream 26" wheels. Why is that relevant? Because if you want the best, who cares what all the lemmings do...

Agreed. More people drive Fords than BMWs. Doesn't mean much
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More people bought VHS than Betamax. Didn't mean much.........Opppppps, yes it did.
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More people bought VHS than Betamax. Didn't mean much.........Opppppps, yes it did.

Could you make things any more slanted?
This is a poor analogy for the obvious reason: The media is the same for both plasma and lcd, unlike betamax.

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It doesn't matter. The best plasmas continue to batter down LCDs in home theater viewing. Who gives a damn what mainstream consumer buys?! These are the same people who listen to crappy pop music. Watch American Idol. And make people like Paris Hilton relevant.

Why should I care? Why should anyone care? LCDs may sell more. But their not as good in all around Picture quality aspects as the best plasmas.

I am pretty sure my Plasma TV will be able to display TV signals, regardless of the sales decline.

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More people bought VHS than Betamax. Didn't mean much.........Opppppps, yes it did.


So when they stop making plasmas does that mean broadcasters are going to stop sending signals to my house?

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You know, if LCD's provided a much better PQ than Plasma TV's I'd be the first to jump on the band wagon and sing its praises from the rooftops...But unfortunately, that's not the reality. It's not going to end here either, because in less than 60 days, Plasma video tech is going to make another substantial jump in PQ that will put LCD's even further behind from where we are at this moment. It just keeps getting better & better!
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post #23 of 303 Old 04-12-2007, 04:59 PM
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Could you make things any more slanted?
This is a poor analogy for the obvious reason: The media is the same for both plasma and lcd, unlike betamax.

No more slanted than most of the posts on this thread.

BTW It was a good analogy. The media was the same for both VHS and Beta video casette recorders........ tape. The analogy is at least as good as Ford vs. BWM - two cars.
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No more slanted than most of the posts on this thread.

BTW It was a good analogy. The media was the same for both VHS and Beta video casette recorders........ tape. The analogy is at least as good as Ford vs. BWM - two cars.

It's a horrible analogy.

Format wars and display wars are different. Plasma TVs will continue to be supported regardless who wins LCDs or Plasma.

Betamax vs. VHS had much more dire consequences for those who adopted the losing format.

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No more slanted than most of the posts on this thread.

BTW It was a good analogy. The media was the same for both VHS and Beta video casette recorders........ tape. The analogy is at least as good as Ford vs. BWM - two cars.

So are you saying beta tapes will work with a vhs player and vice versa?
I guess according to that theory my MiniDV tapes should work in my vcr as well, right? right???


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Originally Posted by johnnybrulez View Post

It's a horrible analogy.

Format wars and display wars are different. Plasma TVs will continue to be supported regardless who wins LCDs or Plasma.

Betamax vs. VHS had much more dire consequences for those who adopted the losing format.

It is no different. The end user did not care about what format (technology) was behind the display on his set. He just knew what he liked and he bought it. No matter if we agree or not, the market remains the driver.
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post #27 of 303 Old 04-12-2007, 05:33 PM
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Quote:
Originally Posted by Nmlobo View Post

It is no different. The end user did not care about what format (technology) was behind the display on his set. He just knew what he liked and he bought it. No matter if we agree or not, the market remains the driver.

Yes it is different. When Beta went away people essentially couldn't use the machines anymore, there were no more movies coming out on beta and no more blank media to record on. The machines no longer had functionality.

If Plasma goes away whats to stop them from functioning? TV signals are the same whether they go to a Plasma or an LCD. There is no LCD signal or Plasma signal. There are Hi-def signals and standard-def signals. Both of which are compatible with either Plasma or LCD.

The car analogy is a more accurate comparison to Plasma and LCD. Yes Ford sells more cars than BMW but does that mean Ford cars are of better quality? Does that mean BMW will close their doors?

Of course not. They both serve their target markets. Ford is for the mainstream average joe who could care less about performance and BMW is for someone who does appreciate performance.
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post #28 of 303 Old 04-12-2007, 05:43 PM
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What do you call these http://www.high-techproductions.com/betamax.asp

The machines still function. You can buy tapes (link above) and record and play back to your heart's content.

It took sereral years before finding betamax movies became hard to locate. But you can still use the machines today.


Anyway, you are still missing the point - the consumer drives the market. In ten years I doubt either lcd or plasma will be mainstream.

This really is a silly discussion anyway. No one changes their mind or preference because of these type threads. The mod recently closed the last one on this topic. It seems that the OP was trolling. He has not posted since his original 'book'.

Maybe it is time to close this thread as well.



cheers.
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post #29 of 303 Old 04-12-2007, 06:23 PM
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Quote:
Originally Posted by Nmlobo View Post

What do you call these http://www.high-techproductions.com/betamax.asp

The machines still function. You can buy tapes (link above) and record and play back to your heart's content.

It took sereral years before finding betamax movies became hard to locate. But you can still use the machines today.


Anyway, you are still missing the point - the consumer drives the market. In ten years I doubt either lcd or plasma will be mainstream.

This really is a silly discussion anyway. No one changes their mind or preference because of these type threads. The mod recently closed the last one on this topic. It seems that the OP was trolling. He has not posted since his original 'book'.

Maybe it is time to close this thread as well.



cheers.

That's a good point. There's NO ARGUEMENT that sales dictates what tech survives or not. But my point is the decision to buy LCD or Plasma is not even close to being the same. It isn't as if we're trying to pick between HD-DVD and Blu-Ray. If I buy a Plasma TV, I will be able to use it for years regardless if LCDs drive all plasmas out of the market in the future. In contrast buying HD-DVD or Blu-Ray is a risk, since your player might become obsolete in the future. Totally different sitautions. The later being more like the Betamax VHS battle... all be it different as well.

It's not the same. When a person goes into a store, it should be what they want. And if PQ in dim situations is what they need? Why the hell should they care what people buy, especially since most of those are people who just want something "flat"?

I don't know what I am doing! AHHHHHHH!!!!
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post #30 of 303 Old 04-12-2007, 07:36 PM
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While I would not argue the merits of the consumer driving the market, I will argue that the numbers show that LCD is actually beating plasma in the sizes that they compete.
Maybe I missed those numbers?

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In the words of English philosopher Edmund Burke, ÂAll that is necessary for the triumph of evil is that good men do nothing.Â
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