Business Tech

Updated at 12:40 p.m. PST with Dell's comments and historical perspective on Apple iMac shortages due to lack of LCD flat panel displays.

LG Display, Sharp, and Chunghwa Picture Tubes agreed to plead guilty to criminal charges for participating in a liquid crystal display price-fixing conspiracy and pay $585 million in fines, the U.S. Department of Justice announced Wednesday.

The three companies worked in concert to set prices on thin-film transistor LCDs, which are used in computer monitors, notebooks, televisions, mobile phones, and various electronics, according to the antitrust unit of the Justice Department.

Apple, Dell, and Motorola were among the companies affected by the price fixing, antitrust regulators said.

"The price-fixing conspiracies affected millions of American consumers who use computers, cell phones, and numerous other household electronics every day," Thomas Barnett, assistant attorney general for the Justice Department's antitrust division, said in a statement.

The three companies, which were charged with violating the Sherman Antitrust Act, allegedly held "crystal" meetings and engaged in communications about setting prices on the TFT-LCD displays. They agreed to charge predetermined prices for the displays, issued price quotes based on those agreements, and exchanged sales information on the display panels, in order to monitor and enforce the agreement, the Justice Department said.

LG Display agreed to pay a $400 million fine, marking the second-highest antitrust fine ever imposed. The company pleaded guilty to setting prices with other unnamed suppliers for the TFT-LCD panels worldwide from September 2001 to June 2006, when the company operated under the name L.G. Philips LCD, a joint venture between LG Electronics and Philips Electronics. LG Display America was known as L.G. Philips LCD America.

Sharp, meanwhile, agreed to pay a $120 million fine and participated in the conspiracy between April 2001 and December 2006 with other unnamed suppliers. The conspiracy involved setting prices in three separate agreements for TFT-LCD panels sold to Dell, which used them in computer monitors and laptops.

And during the period ranging from the fall of 2005 to mid-2006, similar price-fixing schemes were employed in sales to Motorola, which used the panels in its popular Razr mobile phones.

Sharp's conspiracy also touched Apple from September 2005 to December 2006, in which Apple used the displays for its popular iPod music players.

Chunghwa agreed to pay a $65 million fine, for its participation in the price-fixing scheme from September 2001 through December 2006.

The Justice Department began its investigation in 2006 and notes its investigation is still on-going.

"Dell is aware of the announcement and will review its impact, but we have no comment at this time and probably will not in the near term as it's an ongoing investigation," a Dell representative said Wednesday, in an e-mail response.

Sony, a major LCD panel producer, also declined to comment.

For the LCD industry, problems began in the late 1990s when a surge in demand for notebooks and handheld devices drove up the need for LCD glass. As a result, the TFT-LCD makers built glass plants in Korea and Taiwan during 1998 through 1999.

But as those factories came online and began to pump out LCD glass, a glut took hold. And by the fall of 2000, prices on 15-inch flat panels plummeted to a point that in some cases manufacturers were having to sell their panels at $5 to $10 below cost.

Between October 2000 through August 2001, LCD makers were feeling the pain of an over supply of panels. But after August 2001, prices began to rise.

And apparently, it was no coincidence. Five months prior, Sharp had begun fixing prices on TFT-LCD panels sold to PC giant Dell and in September 2001, LG and Chunghwa also began to engage in price fixing, as well.

Analysts, at the time, predicted LCD shortages, especially in the 15-inch panel, would continue through 2002.

IDC analyst Bob O'Donnell noted at the time that while PCs tend to only go down in price over time, flat panel prices have occasionally risen. Said O'Donnell at the time:

LCD is one of the few (markets) where things have actually gone up in price.

Although Sharp admits to engaging in price fixing with Apple's iPod screens in the 2005 to 2006 period, it remains unclear whether other vendors may have engaged in a similar behavior with Apple back in 2002.

That's when Apple was hit with a component shortage of 15-inch LCD panels for its newly introduced all-in-one flat panel iMacs. As a result, Apple suffered a shortage of iMacs after introducing and touting its sleek iMac.

CNET News' Erica Ogg contributed to this report.

LOS ANGELES--There are a lot of bad economic winds swirling, but the high-definition television industry doesn't appear to be moved.

Here at DisplaySearch's HDTV Conference, there is far less handwringing than in past years, when manufacturers complained about rapidly falling prices, the sudden appearance of too many brands, and consumer confusion.

Instead, far more confident industry leaders led a discussion Tuesday that revolved around how to make gentle adjustments to keep the HDTV sales machine in top condition. In North America, shipments are still increasing 17 percent year over year, according to DisplaySearch data. And this is despite the decline of home values, and the rising gas and food prices over the same time period.

"It indicates demand is there, (and) if pricing is right, TV sales will remain strong," said Paul Gagnon, who monitors the TV industry for DisplaySearch. "It's a positive indicator for this industry."

A year ago manufacturers were beginning to worry as prices dropped precipitously how they'd extract a profit out of this fast-maturing flat-panel market.

Turns out, their worries were a bit premature, as prices mellowed and the market sorted itself out. Discount brands have lost momentum (some entirely came to a halt, like Syntax-Brillian, which filed for bankruptcy earlier this year), more HD TV content is available than ever, and consumers generally understand the difference and value of an HD picture now.

Plus, there are still many things for HDTV manufacturers to take advantage of to keep consumers buying new products. New designs, the analog-to-digital switchover, and the continuing move from standard-definition channels to HD channels and services are ways TV makers hope to convince consumers to buy their bigger, fancier TVs.

Big is the key right now. As picture technologies get better, and TV panels are made larger, it's yet another opportunity for the TV makers to charge a premium.

"The ASP (average selling price) peak is coming in 2008. We can't count on shift in technology to prop up ASPs anymore," said Gagnon. That's why manufacturers will continue to pump out larger, and more expensive TVs.

The 40- to 44-inch size TVs' average selling price will peak next year, according Bob Scaglione, senior vice president of marketing for Sharp. Therefore, he notes, 60-inch TVs and larger are a good opportunity for manufacturers to grow their businesses because though prices are dropping, they're doing so more slowly in that range than 40- to 44-inch sets. So expect to see much more activity in terms of promotions around 60-inch and larger televisions in the next few months.

One reason the big manufacturers are starting to feel comfortable again is that they've retaken their places atop the LCD sales figures. The surprising story last year was Vizio's stunning leap to the top of LCD TV sales in North America. It came from severely undercutting the big guys on pricing and selling through club stores.

It's a different story this year. The big guys in TV figured out what Vizio was doing and responded by creating specific models of TVs for mass market stores like Wal-Mart and Target. By associating their brand names with the prices Vizio and others like Westinghouse and Olevia (made by Syntax-Brillian) were offering, the result has been that Samsung, Sharp, and Sony have leaped back into the lead, and Vizio has fallen behind.

Key to that change has been manufacturers like Sony and Samsung working with retailers to tailor their products to specific sets of customers. HDTV makers don't need their products to be a luxury anymore. They want everyone to have a high-def set in their home. The industry has reached buyers that were wowed by the technology first, and now it's on to the people who need to upgrade to a digital TV, or have been waiting for prices to drop.

"It's a new phase of HDTV adoption," said Gagnon of DisplaySearch. "Half of U.S. households have an HDTV, but the next wave of consumers is going to come through mass merchants who focus on a lower price point."