COMMENT: As major vendors spend millions launching a new generation of LCD and plasma TV screens, vendors like Hitachi and Fujitsu are being left behind as retailers dump them for brands that are backed by major advertising campaigns.
Another problem for the early pioneers of plasma TV technology is that retailers are starting to cut back on plasma models with many opting for Pioneer, Panasonic LG and Samsung plasma models over the Japanese manufacturers.
Both Hitachi and Fujitsu do little, if any, advertising when compared to the likes of LG, Samsung or Panasonic for the simple reason that they do not have the retail distribution to generate the sales and thus the margin for marketing.
Another problem for these two Japanese manufacturers is that their plasma offerings are expensive when compared to other manufacturers and while Pioneer has a technological edge both Hitachi and Fujitsu have lagged behind.
This year the plasma market has declined by more than 35%, prices have fallen by as much as 40%. This has led to both Fujitsu General and Hitachi bleeding losses with no end in sight to the losses for either company.
Last week, LG Electronic sued Hitachi claiming the Japanese company infringed on patents related to LG’s plasma displays. The patent infringement and damage compensation lawsuit will be filed in a US district court in the US state of Texas later today, LG Electronics said in a statement.
LG said its complaint alleges Hitachi, its US unit and Fujitsu Hitachi Plasma Display Ltd., a joint venture with Japan’s Fujitsu Ltd., infringed on seven LG patents.
The South Korean company is a major manufacturer of plasma display panels used in flat screen televisions. Despite several planned new plasma models and licensing deals with Panasonic, Hitachi in Australia has struggled with several retailers in recent months dropping the brand. Globally Hitachi reported a 77 percent drop in net income to $11 million.
The Hitachi Plasma division also reported a $180 million operating loss with Japanese bosses cutting back on advertising spending due to the losses.
The problem for both Fujitsu and Hitachi is about to get worse in Australia as Sony, Toshiba, Panasonic and Pioneer are set to roll out major campaigns that will leave these two Japanese brands wallowing in the “Has been” market. They will also have to compete with a massive migration of consumers to a new generation of LCD TV.