U.S. T.V. maker Vizio could scrap its PDP business and concentrate on LCD TVs. / Korea Times File |
By Kim Yoo-chul
Staff Reporter
Vizio, one of the leading plasma television producers in North America, plans to completely scrap its PDP business before the end of June.
"From sometime in the second quarter, Vizio won't sell its plasma television sets and possibilities are very low that the company will re-enter the plasma business," a high-ranking executive said Friday.
"To tackle worsening profitability in the company's overall TV business, Vizio needs to further concentrate on LCD TVs," according to the executive who asked not to be identified.
Vizio officials weren't available for immediate comment.
The decision will possibly lift profits of South Korea's LCD panel suppliers such as Samsung Electronics and LG Display as Vizio benefits by selling medium-sized LCD products through cut-rate retailers Costco and Wal-Mart.
Samsung is the world's top LCD panel producer, followed by LG Display.
In contrast, plasma TV producers are increasingly looking for a "big breakthrough" to sustain profits amid slowing demand for PDP TVs, analysts and industry officials said.
Nam Yong, CEO of LG Electronics, recently clarified that his company is not considering the plasma business as a strong earner.
In the first quarter, Vizio was the top seller in North America's LCD TV market as its low-tier and less-pricey strategies had appealed to cash-strapped general consumers. Vizio was the fourth player in the PDP TV business during the period, according to DisplaySearch, a market research firm.
In the wake of global turmoil, plasma technology is on the wane as consumers seek LCD TVs as their flat panel of choice, attracted by lower prices.
Plasma screens have strength in a wide-viewing angle and cheap prices. But LCDs use less electricity than PDPs and are better in bright rooms. They are also more affordable in smaller sizes.
The biggest merit ― price ― enjoyed by plasma TVs is dissipating as chances are high that consumers will buy energy-efficient and technology-advanced LCD TVs with discounted prices.
Citing such a bleak outlook, the industry leader Panasonic is slashing its PDP TV production, while Pioneer has exited the TV business completely.
LG's Nam has also been in the same line with his overseas rivals. "LG will make a crucial decision if the sector falls into the red," according to the top company executive.
"Vizio is expected to stop production of PDP TVs. Although PDP business has strengths in the over 50-inches and in emerging markets, time is approaching for plasma TV makers to decide on their future," according to an executive at Samsung Electronics.
During the first three months of this year, Samsung was the runner-up to Panasonic in North America's plasma TV market with a share of 27 percent. LG Electronics ranked No. 3 with 11.9 percent, according to DisplaySearch.
yckim@koreatimes.co.kr
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