Sony to focus on flat panel TV technology

Sony is dropping its money-losing rear-projection TV business worldwide to focus on two flat panel technologies— liquid crystal display and organic light-emitting diode, the company said Thursday.

Sales of rear-projection TVs had been declining recently as LCD TVs gain in popularity and get bigger in size, Sony Corp. spokesman Shinji Obana said.

In October, Sony lowered its global sales forecast for rear-projection TVs— which uses a projector to create images on large screens— to 400,000 from an earlier 700,000, down from 1.1 million sold the previous fiscal year.

By contrast, Sony expects to sell more than 10 times as many LCD TVs: 10 million LCD TVs this fiscal year through March, up from 6.3 million the previous year.

Sony sells 85 per cent of its rear-projection TVs in the U.S., and about 10 per cent in Europe, according to Obana. Sony had been making these TVs at three plants, in Japan, Mexico and Malaysia, but all production will be halted, he said.

The decision to abandon rear-projection TVs underlines Sony's strategy of focusing on LCDs and OLEDs at a time when competition is heating up in flat TVs.

In the fiscal half-year through September, Sony lost $526.3 million US in its TV operations, partly because of losses tied to rear-projection TVs. Diving prices of LCD TVs also contributed to the red ink, Obana said.

The world's electronics makers are all working on LCD technology for TVs, as well as another technology called plasma display panels, or PDP.

Earlier this month, Sony began selling a small 11-inch TV that uses a relatively new but expensive flat-panel technology called OLED. Sony's XEL-1 measures just three millimetres thick and delivers clear vivid images.

Earlier this week, Matsushita Electric Industrial Co., which makes Panasonic brand products, Hitachi and Canon forged a tie-up in their liquid crystal display businesses— another sign of how Japanese electronics makers are being forced to work together to ride out the tough competition.

Sony has an alliance with South Korea's Samsung Electronics in LCDs.

Sharp Corp., another major Japanese LCD maker, formed a partnership with Toshiba Corp. last week. Under the deal, Toshiba will buy LCD panels from Sharp for its TVs.