tvinstore.jpgSales of flat-panel TVs will overtake those of traditional CRT-based TVs in the US next year. Just three years later, the same will happen in China.

This shrinking gap in adoption of new technologies speaks volumes for the speed at which China is evolving and makes me wonder how much longer we will continue to label China as an “emerging economy”.

According to this AP story, sales of bulky CRT TVs are in steep decline in the US because consumers are increasingly enamoured with the thin designs and stunningly sharp pictures available with flat-panels sets.

US sales of CRT TVs will fall from an estimated 14.4m units this year to 10.4m in 2007, according to iSuppli, the analyst firm, while sales of LCD TVs are predicted to rise from 10.9m units to 17.8m.

In China, meanwhile, sales of flat-panel TVs will overtake those of CRT TVs and reach 22.6 m units in 2010, according to Chinese TV maker TCL, whose chairman and president Li Dongsheng is quoted in a DigiTimes article.

TCL predicts domestic demand for flat-panel TVs will total 9.5m units in 2007, more than double the 4.6m expected to be shipped this year. As a result, China will overtake Japan and become the third largest flat-panel TV market next year.

Major TV makers like Sony and LG Electronics have been steadily reducing their CRT shipments to focus on the flat-panel TV market. So too have China's home-grown players such as TCL.

Making TVs remains is a cut-throat business. TCL, for example, sold 14% less TVs in the third quarter of 2006 compared with the year-earlier quarter. Nevertheless, it swung into a quarterly profit and took comfort from declining losses in Europe — where it has a JV with France's Thomson — and the first-ever profit from its North American operations.

TCL's China business is profitable but its a highly competitive market and TCL has a 9.9% share . Only one manufacturer, Hisense, enjoy a market share of more than 10%. The top five suppliers are all domestic but snapping at their heels are formidable foreign rivals such as Samsung, Toshiba and Philips.

Due to the strong demand from China, the LCD panel industry is moving to the mainland from Taiwan, Japan and South Korea. China has traditionally lacked the flat-panel technology to make LCD TVs and so its TV manufacturers have been unable to achieve much of a cost advantage in this particular market while they have had to buy the flat panels from Asian rivals. However, that is changing due to the tangled web of alliances in the industry.

Beijing Orient Electronics Group cooperates with Korean Hyundai, Shanghai Video & Audio Electronics cooperates with NEC, while TCL and three other domestic TV manufacturers founded Shenzhen JuLong Optoelectronics to give China home-grown expertise in flat panels.

Shenzhen Julong Optoelectronics is currently building a $2.3bn facility in Shenzhen which will be capable of producing 90,000 LCD panels a month using the latest so-called “sixth generation” LCD technology by the end of 2008.

Next month, Shanghai hosts the Asian LCD Industry Summit, whose site has some good background on the LCD industry. See also this story by Indian newspaper The Hindu.


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