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Foreign firms learn LCD beats plasma TV

By Liu Baijia (China Daily)
Updated: 2007-01-26 09:35

After a relentless price war and tough competition against local brands in 2006, foreign flat TV makers expect a better year ahead through adjustments to attract more domestic consumers, strong innovation capacity and an abundant supply of flat TV panels.

According to the State Information Center, Chinese consumers bought 4.77 million flat TV sets LCD and plasma screens out of a total 35 million TV sets purchased in the country in 2006.

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Although the share of flat TV sets was only 13.6 percent of the total, sales of LCD and plasma TV sets accounted for 36 percent of 93.59 billion yuan in total sales last year.

Growth in the number of flat TV sets shipped was also impressive with a rise of 151 percent.

"China will become a major arena of competition in flat panel TV sets for global TV makers before new technologies come out," said Cai Ying, head of the State Information Center Market Information Division.

LCD TV sets accounted for over 80 percent of the shipment of flat panel television sets last year. Plasma screens represented the remaining 20 percent, a rate expected to continue as market leaders, including domestic firms Skyworth and Konka, as well as Sony and Toshiba, focused their production lines on LCD.

Last year, domestic brands continued their dominance in the LCD TV market with a share of almost 65 percent. And of the top 10 players, only three firms Samsung, Sony and Toshiba were foreign brands.

When measured in sales, foreign brands showed better performance, taking 45 percent of the total.

The performance of foreign brands in 2006 was much better than the previous year, when they only held 20 percent of the LCD market.

"Foreign brands will see a better time in 2007, especially in first- and second-tier cities," said Lu Renbo, a senior TV market expert with the State Council Development and Research Center.

First- and second-tier cities refer to the metropolises ofBeijing,Shanghaiand Guangzhou, as well as other provincial capitals.

Statistics from Gome Eletrical Appliances Holding Ltd, the largest home applianceretailchain in China concentrated in large cities, show the share of foreign brands rose to 44 percent in 2006 from 31 percent in 2005

The State Information Center predicts the shipment of LCD TV sets will grow by 80 percent this year to 7 million units, while the plasma set market will see a 35 percent increase to 1.1 million units.

Liu Buchen, president of the home appliance market consulting firm SBFM Management Consulting Co Ltd, believes foreign brands will be able to get about a half of the market share in 2007.