It is always fun to watch companies implement strategies as they either aim to expand market share explicitly or attempt to build both market share and margins at the same time. What we are seeing with flat panel televisions is that more manufacturers are sacrificing sales volume in the smaller-sized, smaller-margin displays for the larger-sized, larger-margin variety.
Based on a Japanese language news article published today by the Jiji press, Hitachi's (HIT) subsidiary Hitachi-Fujitsu Plasma Display is said to have announced it has developed 50- and 60-inch high-vision (high-definition) plasma display panels.
Hitachi plans to expand its offerings in the largest class of plasma displays adding to its existing 55-inch model. All of the 60-inch class plasma panels it plans to manufacture are said to be the first full high-definition resolution models available in the world at that size. A portion of its 50-inch class will be full high-definition.
In the second quarter, Sharp fell to third-place globally in terms of LCD TV units sold. Sony (NYSE:SNE) remained in the first spot followed by Samsung in second. On a revenue share basis Sharp fell to the fourth spot as Philips/Magnavox moved into third and Sony and Samsung maintained their first and second place rankings, respectively. For further analysis, see DisplaySearch's latest report.
In response to Sharp losing ground in Q2, Kleis commented:
"It is not our intention to lose market share, but you always have to see where you are strong and where you are weak. I think we even gained market share in the bigger screen sizes."
Essentially, Kleis explained that increasing sales volume in larger LCD TVs is 'more important than maintaining or increasing market share for its own sake' because of the higher profit margins given less pressure to cut prices on the larger models.
Larger screen LCDs, which Sharp describes as 37" or greater are responsible for 70% of its LCD revenues.
"As long as we are unique there will not be much of a price development. Only two, three manufacturers can produce in those sizes."
Kleis admits he is 'worried a little' that some manufacturers could resort to dumping in order to unload inventory.
Hitachi (HIT) and Sharp (OTCPK:SHCAY) 1-year comparison chart: