LCD line may help Sony revive profit from TVs

Sony expects its television business to return to profit in the second half of this fiscal year on the back of strong demand for its recently launched Bravia LCD TVs, a senior executive said Wednesday.

The Tokyo company, a long-time leader in the TV market because of its Trinitron cathode ray tube technology, has been suffering in the last few years because of its failure to fully embrace flat-panel TVs. Competitors such as Sharp were quicker to take advantage of consumer demand for such TV sets and have grabbed market share from Sony.

Sony began fighting back last year with a range of LCD TVs under the Bravia brand. They sold well and helped Sony more than double its share of the global LCD TV market, said Sony Executive Deputy President Katsumi Ihara, speaking on the sidelines of a Tokyo flat-panel display conference Wednesday. On a revenue basis, Sony estimates it had 9% of the flat-panel market in the April to September period, and 19% in the October to March period, he said.

Sony anticipates demand will continue to be strong and expects to double LCD TV shipments during the current fiscal year, said Ihara. As a result, Sony’s TV business should return to profitability in the second half of the current fiscal year, meaning the period from October 2006 to March 2007, he said.

Market research organizations agree that Sony made a strong showing in the LCD TV market, but differ slightly on just how well it is doing. In February, DisplaySearch said Sony’s market share grew from 9% in the third quarter of 2005 to 15% in the fourth quarter on a unit basis, to become the No. 1 LCD TV maker during the last three months of the year. ISuppli estimated in March that Sony had 15% of the market during the fourth quarter but trailed Sharp, which it ranked first.

With no let-up expected in demand for LCD TVs, Sony plans to increase panel production at S-LCD, a joint-venture it operates in South Korea with Samsung Electronics. The joint venture started operating one factory last year and is in the process of increasing production by 25%. On Wednesday Sony and Samsung said production will be increased by a similar amount to keep up with demand. Last week the two companies also announced plans to invest around $2 billion in a second factory in South Korea.

Sony is expected to announce detailed results for its TV operations next week when it reports its financial results for the fiscal year to March.