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China's Rebirth: The 2012 LCD TV Predicament
By Andy Sim - on 03 Aug 2011, 2:37pm

"Chinese makers offer better after-sales services and their image quality is just as good as those from foreign manufacturers," said a woman shopping for a TV at a store in Beijing. - quote from Daily Yomiuri Online

A handful of the world's populace are needlessly perturbed by the 2012 doomsday prophecy. Well, one which the Mayan's Long Count calendar supposedly foretells that is. Closer to reality, an imminent and more pressing situation for television manufacturers to address is at hand when the next calendar year comes around. And it has nothing to do with the Mayans or nasty apocalyptic visions.

Recent reports from Japan's news publication, The Daily Yomiuri Online, have highlighted the real and present danger of a saturating LCD trade which may lead to global price wars, credit to a flurry of Chinese flat-screen factories who'll turn operational before 2012 passes over.

Furthermore, an anticipated six-fold increase from China's current number of flat panel factories will equal, if not surpass, Japan's numbers in 2012. Based on other reports such as those from research institute Displaybank, China has since toppled North America's throne to claim the prize of being the largest LCD TV market on the globe.

Conceivably, an influx of television sets from the Chinese could possibly induce declining prices worldwide. With such a huge stake in the industry, Japanese telly makers are earmarked to be the hardest hit if this trend realizes itself. In China alone, Chinese manufacturers were able to secure up to 78 percent of flat-panel TV sales during the last quarter of 2010, while Japanese makers such as Sharp only managed to bag 5.1 percent.

On a larger scale, Sony knocked LG off the number two spot in terms of global flat-panel TV sales last quarter. Despite their ascendancy over the Koreans, Sony was unable to benefit from larger profit margins due to dipping prices. Collectively, Sony posted a loss of 26 billion yen between April and December in 2010. And according to the Daily Yomiuri, Panasonic isn't faring too well either with losses expected in the present financial year for their TV business line.

In turn, the spill-over of flat-panel displays would compel Japanese electronic makers such as Panasonic or Sony to reassess their business approach. As if on cue, Reuters recently published an article on Sony's plans to restructure its loss-making television business as well. The damage was inflicted, however, by "lower cost Asian rivals such as Samsung Electronics" according to Reuters' report.

On the bright side, this "2012 predicament" may serve as an oblique catalyst for Japanese TV manufacturers to rethink their business strategies. And that, perhaps, is exactly what Sony is hoping to achieve in order to avert a major enterprise disaster. It is said that Sony will focus on profits rather than unit sales.

Locally, television retailers and buyers here have already witnessed an obvious plunge in LCD and Plasma TV prices even before the advent of 2011. Today, a 42-inch Full-HD LED 3D TV can easily be snagged for $1,700 or less. Who knows? The same 42-inch display could be drastically cheaper come 2012.

Of course, depreciating prices will always bode well for consumers' pockets. But if Japanese panel makers would like to stay relevant in the industry, perhaps it's time for the giants to weigh up the Chinese threat a little more seriously. Else, it won't be China and their TV-making cohorts who'll end up in the red when the crimson tide comes in.

Andy Sim

Andy Sim / Former Senior Tech Writer

Andy is a self-made geek with a penchant for good music and a hearty pint. His domain includes swanky TVs, notebooks and networking gizmos.