October 11, 2004 10:50 AM PDT

Motorola sinks TV dreams

A number of companies jumped into the market for LCD TVs in the past year, and now some of the electronics deals are starting to fizzle out.

Motorola has scrapped an alliance with Moxell Technology to bring Motorola-branded plasma TVs, LCD TVs and monitors to North America and China, a nation where Motorola enjoys high recognition and brand awareness. The TVs and screens had been expected to come out in the middle of this year.

Motorola showed off 15 different models ranging in size from 13 inches to 47 inches at the Consumer Electronics Show in January.

A Motorola representative said the deal ended because of a "difference of opinion over the portfolio of products in North America." Some Motorola LCD monitors did come out in China. These will be sold off. TVs, however, never made it to either market, and North America did not see a launch of Motorola LCDs.

In the past year, several companies have unfurled ambitious plans to enter the consumer electronics market. Although PC makers had largely floundered in their efforts to get into this market in earlier years, many asserted that the proliferation of PC standards into electronics would allow them to enter the market now.

Others, such as Westinghouse and Polaroid, asserted that brand-name recognition gave them an opportunity to gain an early foothold.

Sales of large-screen TVs, however, have not lived up to earlier expectations. This in turn has led to price erosion--which hurts manufacturers--but not enough to spark widespread demand.

"LCD TVs were supposed to be the panacea, but (shipments) did not live up to expectations," said Vinita Jakhanwal, a senior analyst with research company iSuppli, speaking in July of the LCD industry in general.

Motorola was further impacted by the fact that its sets were to sell in China, where household incomes are lower.

Schaumburg, Ill.-based Motorola is amid an overhaul. Last year, it hired Ed Zander, formerly Sun Microsystems' chief operating officer, and this year it announced layoffs and spun off its chip division.

 

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