LCD TV makers fail to score with World Cup fans

High prices partly to blame, say analysts

Simon Burns in Taipei, vnunet.com 14 Jun 2006

A long-predicted surge in sales of large flat-screen TVs to World Cup fans has failed to live up to expectations, with high prices partly to blame.

Although bad news for manufacturers, it could soon mean bargains for consumers on mid-range LCD TV models, industry observers say.

Shipments of LCD TV panels from LG-Philips LCD were unlikely to meet forecasts for the second quarter of the year, the company announced yesterday.

LG-Philips, the world's second largest LCD TV maker, cut its shipment growth forecasts for the period from 50 per cent to 25 per cent.

Market watchers have been warning that forecasts were over-optimistic for some weeks, but the news from LG-Philips is the first clear confirmation.

Analysts blamed the news for a dramatic drop in LG-Philips' share price yesterday. "We could not confirm the much-anticipated 'World Cup effect'," analysts from Korea Investment and Securities wrote in a research summary last week.

"Unlike panel makers' high expectations for LCD-TV sales growth prior to the 2006 World Cup, there were no signs of brisk sales. Despite the aggressive marketing activities of TV set makers, demand for high-end TVs remained weak."

The LCD TV market is still expanding fast, observers stress, but growth is not as rapid as expected.

LCD panel makers boosted output in anticipation of World Cup demand. If this demand does not materialise very soon, the stockpiling of inventory will force unanticipated price cuts for some models.

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