THE electronics giant behind Panasonic products has forecast that global demand for upmarket plasma televisions and the profitability of the firm's plasma business will run above initial targets.
Speaking ahead of its quarterly earnings report due next week, Matsushita Electric's head of plasma TV business, Masaaki Fujita, said he now expects the global market for plasma sets to reach six million units in the year to March, one million above
a forecast unveiled in April and more than double the 2.7 million units sold in 2004-05.
Matsushita is the world's top seller of plasma TVs, ahead of Samsung SDI and LG Electronics of South Korea and Japan's Pioneer in the fast-growing market.
Mr Fujita expressed confidence that Matsushita would be able to secure 35 per cent of the global market. Based on the new forecast, Matsushita would sell 2.1 million plasma TVs in 2005-06, above its previous forecast of 1.75 million units.
"There are some markets where demand is 30 per cent above our initial expectations," he said.
"All told, demand is roughly 20 per cent above forecast.
"Prices are falling, however, so revenues will not increase by as much."
Plasma is one of three technologies vying for share in the flat TV market. The other two are liquid crystal displays (LCD), which are primarily used for TVs under 40 inches, and rear-projection technology, best suited for TVs above 50 inches.
Matsushita has invested aggressively in plasma television production to boost efficiency and fended off a growing threat from Sharp, which recently introduced a series of LCD sets of 37 inches and above to encroach on plasma's turf.
Manufacturers of large sets over 40 inches using either LCD or plasma technology are spending aggressively on technology to make cheaper sets and draw consumers away from the boxy, cathode-ray TVs which still dominate most homes. Analysts say consumer technology giants are sacrificing profit for market share. Mr Fujita's comments are a positive sign for Matsushita's April to June earnings, due to be unveiled next Thursday. He said profits in the plasma business, one of Matsushita's key earnings drivers, were also above initial projections.
Last week, Samsung reported a 46 per cent slump in quarterly profits on the back of tumbling prices of memory chips and lower margins on flat screens and mobile phones.
Samsung's key rival in flat screens, LG Philips, also posted a 94 per cent fall in quarterly profit earlier this month, but earnings beat forecasts and the firm predicted a recovery in panel prices in the second half.
The factsTHE basic idea of a plasma screen is to illuminate tiny fluorescent lights to form an image. Each pixel is made up of three lights - one red, one green and one blue. The plasma display varies the intensities of the different lights to produce a full range of colours.
Plasma is often called the "fourth state of matter", the other three being solid, liquid and gas. A plasma is a distinct state of matter containing a significant number of electrically charged particles, a number sufficient to affect its electrical properties and behaviour. Plasmas are estimated to constitute more than 99 per cent of the visible universe.
The concept of a plasma display panel was invented by Larry Weber at the University of Illinois in 1964. Now, the world's largest plasma display makers are LG Electronics, Samsung SDI, Matsushita Electric, owner of Panasonic, and Pioneer.
