Hitachi Drops $1.3 Billion TV Future In Doubt

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Hitachi who earlier this year quit the Australian consumer electronics market is staring down the barrel of an A$1.3 billion in losses from their flat panel operations with speculation mounting that the Company will quit the flat panel market altogether by mid to late 2008.

On Friday Hitachi revised its full-year earnings forecast, to a US$697 million loss, from the original estimate of a US$99.6 million net profit.

The struggling Japanese manufacturer who is banking on its thin screen panels has said that  its digital media and consumer products segment would record an operating loss of US$1.1 billion for the full year ending in March 2008. This is far greater than its initial forecast.

A senior Hitachi executive told ChannelNews some weeks ago that there was “Grave” concern that the Company would not make it in the flat panel market and that the Japanese company would pull the plugs by mid 2008.

Currently the Company is mounting a major advertising and marketing campaign for their 1.5mm thick TV’s which come without speakers or HD TC connectivity. This many analysts are saying will be a problem as research is showing that most consumers prefer a built in TV tuner.

In addition the on-board power supply has been downsized by 33 per cent too, a move that allows for a much thinner screen overall.

 

In Japan the Wooo range is available in a range of colours, including white. Hitachi has also confirmed that the Woo will be available for European markets and the USA in three ascending sizes of 32, 37 and 42-inches.

In their press statement Hitachi said that their current loss was attributed to a protracted decline in market prices–particularly for older models–poor sales for large-screen models and an accelerating of inventory disposal.
Hitachi also plans to book restructuring costs of approximately $558 million, primarily in its flat-panel TV business, including an impairment loss on plasma display panel production facilities.

They also plan to write down $617.6 million on deferred tax assets after adjusting downward the profitability of its digital media and consumer electronics division, of which flat-panel TV is a core product.

In an effort to be competitive Hitachi late last year turned over control of its LCD panel production unit to Matsushita Electric and Canon leaving it to focus on making plasma display panel TVs. They are also banking on Chinese manufacturers taking up some 30% of the plasma panels churned out this year in an effort to raise the plant utilization rate from 70% to 80%.

They also claim, that they will introduce a 10-millimeter thin plasma display panel TV in 2010, following its launch of the 35-millimeter thin plasma display panel TV scheduled for next year.

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