Sony targets 20 pct of European LCD TV market

By Lucas van Grinsven, European Technology Correspondent

PARIS (Reuters) - Sony Corp (6758.T: Quote, Profile, Research, Stock Buzz) aims to increase its European market share in flat LCD televisions to 20 percent this year after failing to meet demand in late 2005, its European president said on Wednesday.

The Japanese firm, the world's biggest consumer electronics company, climbed to the global No. 1 position in liquid crystal display TVs in the fourth quarter from being No. 4 in the third quarter, according to market research from DisplaySearch. Sales surged 164 percent as a result of its new Bravia models.

In Europe, even though Sony says it increased its share to around 14 percent from well below 10 percent, it is still lagging behind Samsung (005930.KS: Quote, Profile, Research, Stock Buzz) and Philips Electronics (PHG.AS: Quote, Profile, Research, Stock Buzz) as the Japanese firm could not fulfil orders.

"We still have huge back-orders from December," Fujio Nishida said at the Reuters Global Technology, Media and Telecoms Summit.

"It was perhaps still one-third" (of orders), he said.

"This year we expect a 60 to 70 percent increase for the LCD market in Europe. We will more than double (sales) and increase the (market) share to over 20 percent," Nishida said at the summit, held in Paris.

Sony introduced the Bravia brand with the first models fitted with LCD panels from its own joint venture plant with Samsung. Sony previously bought LCD panels from external suppliers.

This meant Sony did not have sufficient access to high quality displays, but also that retailers did not support its products, Nishida added.

"A salesman can make up a story that Sony's panel was coming from Samsung or Sharp, so you don't have to pay 20 percent more, even though we do a lot of enhancement technology on top of the panel. Now we have both, panel and those technologies, which makes it a real Sony TV. That's the message. Now it's a real Sony and has people coming back to us," he said.

PRICE FALLS

Booming demand for Bravia and LCD TVs from other vendors will be driven by sharply falling retail prices.

LCD TVs will become 20 to 25 percent cheaper this year and another 20 percent next year, Nishida reckons.

"Right now consumers are paying 40 euros ($48) to 45 euros per inch of LCD TV. That may go down by 40 pct over next two years, to as low as 20 to 25 euros per inch. That means you'll pay may be 1,000 euros for a 40 inch TV," he said.

Another reason for higher LCD demand is the first big push of high definition television (HDTV) in Europe, ahead of the soccer World Cup in Germany this summer.

Several broadcasters and cable TV companies in Europe will distribute the signal and promote "HD Ready" LCD televisions that can take advantage of the four to five times better sharpness of the picture.  Continued...