Panasonic crushes plasma TV rivals

Matsushita Electric Industrial, owner of the Panasonic brand, continues to dominate the market for large-screen plasma TVs, despite increasing price competition.

Panasonic's strong sales crushed challenges from Korean and Japanese rivals during the Christmas sales period, according to recent market data.

Unit sales of Panasonic's plasma TVs surged almost 70 percent year-on-year to reach 1.22 million during the last three months of 2006, the company reported. Revenues for the quarter were up 26 percent on the previous year at US$1.54bn.

"[Quarterly] plasma display panel TV sales were more than double those of [Matsushita's] two Korea rivals, Samsung Electronics and LG Electronics," said Nomura Securities analyst Eiichi Katayama in a research briefing.

Matsushita sold 3.4 million plasma TVs in 2006, compared to 1.3 million for Samsung and 1.7 million for LG.

"While both Korean manufacturers struggled to turn a profit, Matsushita's profit margin approached 6.6 per cent," said Katayama.

The battle has been so bruising for smaller players, that other Japanese plasma screen makers, such as Hitachi, may put expansion plans on hold, the Japan Times reported.

While Matsushita's position as a technology leader gives it an advantage over rivals, strong sales and falling prices for large-format LCD screens have dragged plasma TV prices down.

Matsushita's response has been to announce major plans to boost output and cut production costs.

"We look for Matsushita to move towards a more comprehensive strategy for boosting sales in the large-screen TV market, adding flexibility to its approach with a move into certain segments of the large-screen LCD TV market," said Katayama.

Matushita has been wounded by weak performance at its JVC subsidiary during 2006.

"Sales for JVC and its subsidiaries totalled US$1.48bn, down 17 percent from the third quarter of the previous year, due primarily to sluggish sales of audio-visual equipment," the company announced last week.

Matsushita is believed to be looking for a buyer for some or all of its 53 percent stake in JVC. Private equity firms are interested in JVC, according to Japanese media reports, and a management buyout is also possible.