The honorarium of LCD panels hew by 80% between 2004 and 2008, while the manufacturing costs declined by 50% (see chart). So margins dwindled to approximately nothing. Some suppliers had no appropriate but to peddle their panels at a loss. Clever accounting hid the mar for a while.
Panel-makers with their own video brands, such as Samsung and Sharp, covered their panel losses with profits from the finished article. Yet lollygagging sales in 2011 mangy that even televisions may ruin into the red. For firms that only cater to screens, such as Chimei Innolux and AU Optronics, the distress may be as fancy and exquisite as an Oliver Stone film. No one has a answer what to do.
Firms have tried to harvest the value of the sets themselves, by increasing the vet vastness and improving the archetype quality, to no avail. They have added interactive features such as Google TV or Sony’s online services, but sofa spuds snub them. LCDs are hurting the world’s biggest consumer-electronics firms. Sony may conquered riches on its TV businesses in 2011 for its eighth consecutive year.
In November it halved a past sales anticipate to 20m televisions. This might be a capable thing: Sony loses $80 on every set it sells. Panasonic expects its small screen portion to be loss-making for its fourth year competition and is consolidating factories, shuttering operations and sacking people. Even Samsung, the biggest producer, has posted three quarters of losses on panel manufacturing this pecuniary year. Sharp has converted two factories to exhort miniature LCD panels for smartphones and iPads.
Smaller panels last profitable, for now. Televisions are attractive adulate breath tickets or long-distance phone calls. Everyone loves them. But because so many firms provide them, hardly any can rotation a profit.
To originate matters worse, recent Chinese factories may come onstream in 2012, depressing prices even further.
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