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If you've been eagerly awaiting the opportunity to own the thinnest flat-panel LCD TV, now's your chance.

Hitachi's 1.5 LCDs are just that thick.

(Credit: Hitachi)

Though already available in Asia, the 1.5-inch-thick TVs from Hitachi are now available in the U.S. The sets come in three different screen sizes, 32 inches, 37 inches, and 42 inches.

One of the secrets, by the way, of how Hitachi managed to slim down the TVs so much is that they took out the ATSC tuner. And although it is definitely the thinnest LCD TV, it's downright bloated when compared to Sony's impossibly thin OLED TV, which measures a mere 3 millimeters thick.

See my colleague David Katzmaier's take on the latest TV from Hitachi here.

Update:This blog has been corrected to reflect that the total flat-panel display business value represents global sales.

SAN DIEGO--This year could be a turning point for the flat-panel TV industry, as it decides how it will face the dual threats of market saturation and rapidly declining prices.

The total flat-panel display business in the worldwide in 2007 was $102 billion, up from $11 billion in 1998, according to DisplaySearch. And while that growth is encouraging, it's not necessarily good news for all sectors of the market.

One of the success stories is the rise of LCD (liquid crystal display) televisions, which finally overtook CRT (cathode ray tube) TVs in units shipped in 2007 for the first time ever. Other good news for the industry: the prices of the actual panels coming out of the factories owned by Sharp, Samsung, and others, were actually up last year, something that hadn't happened since early 2003, according to DisplaySearch. Panel suppliers engineered that by creating a shortage through carefully controlled inventory.

But the picture for the year ahead isn't as rosy for everyone.

Second-tier TV brands like Westinghouse continue to drive down prices for LCD TVs, which is good for consumers, not so good for retailers and other TV makers.

(Credit: Westinghouse)

"It's going to be a tough year for (original equipment manufacturers), brands, and retailers," Ross Young, president and founder of DisplaySearch, said here at the U.S. Flat Panel Display conference put on by his firm.

That's principally because the average selling price of flat-panel televisions in retail stores continue to drop, thanks to second- and third-tier TV makers that are driving down prices, as well as the growing power of Wal-Mart Stores and other mass-market retailers in the consumer electronics space.

Wal-Mart in particular is positioning itself as a place to buy traditional top-tier brands, not just cheap imports. It's expanding all consumer electronics offerings in its stores this coming year. Goldman Sachs analyst Matthew Fassler, who follows the CE industry, called it "a well-coordinated set-up" that displays and promotes brands like Samsung and Sony.

"Clearly, there's the beginning of a market-wide shift here, which for specialty retailers, doesn't bode all that well," Fassler said.

Sony first started offering specific models of its LCD TVs to Wal-Mart (and also to Target) midway through 2007 on a limited basis. Last week, Stan Glasgow, president of Sony Electronics in the U.S., told CNET News.com that his company would be expanding the number of TV models in the deal with Wal-Mart by 40 percent.

There seems to be a number of shifts occuring, including one back toward the established brands like Sony, Sharp, and Samsung, and away from the smaller players.

"This could be a shake out year in LCD TV market," DisplaySearch's Young said.

More than others, he added, it will probably help Sony in particular. "They're well positioned in the high end of market, and well positioned to take lots of share. They're making a lot of aggressive moves with OEMs, which makes things more difficult for second and third tiers."

The signs are already pointing that direction. After a poor showing in the first half of 2007, Sony rebounded in a major way in the most recent holiday season and despite its tradition of charging higher prices than its competitors, came away in the fourth quarter of 2007 as the top supplier of LCD TVs.

SAN FRANCISCO--Though times may be tough for other TV manufacturers, Sony says it isn't feeling a thing yet in its electronics division here in the U.S.

At a press briefing with reporters here Wednesday evening, Sony Electronics President Stan Glasgow said that despite indications of a weakening U.S. economy, all is well with the Japanese electronics giant.

"I don't think consumers buying consumer electronics yet feel that," Glasgow said. "Sony did particularly well during the holidays. It was the best in the history of Sony Electronics in the U.S."

A boon to Sony's bottom line has been the growth of its Sony Style stores, both brick-and-mortar outlets, and its online presence. Glasgow said Sony Style experienced a 34 percent growth in sales over the 2007 holiday shopping season.

Another high point was its TV business. According to data collected by market research company DisplaySearch, Sony lead all LCD TV manufacturers in the fourth quarter of 2007 with 12.3 percent of worldwide shipments, considered a major comeback for the company.

One of the things that appeared to help Sony in 2007 was its expansion of specific television models made to sell in Wal-Mart Stores and Target. Glasgow said the company is expanding that commitment to supplying those retailers with 40 percent more variety of TV models this year.

Glasgow kept the gloating to a minimum, however, when it came to Blu-ray's recent victory in the format spat with HD DVD. As one of the leading investors and supporters of Blu-ray, Sony does see prices dropping on standalone Blu-ray players over the next couple years, but it will be 2009 before a $199 unit becomes a reality, he said. Price drops will happen, but it needs to be done in an orderly fashion, Glasgow said.

"I don't see any reason to do it stupidly and lose money," he said.

In the meantime, Sony is "in discussions" with a number of partners in order to get them on the Blu-ray bandwagon. An Microsoft Xbox 360 console with Blu-ray is certainly "a possibility," he said.

But perish the thought that Sony will take trade-ins of now-obsolete HD DVD players. "Sony is not going to make up for Toshiba's sins," Glasgow said emphatically.

Other tidbits gleaned from the evening:

• Though 11-inch OLEDs are the largest size Sony is offering right now, bigger screen sizes are on the way--some day. But there are currently limits on exactly how big Sony can make them right now. Glasgow specifically said that there are major obstacles (mostly to do with the physics of creating the panels) to make OLED screens larger than 30 inches. "It would take another significant investment to get bigger than that," he said.


• Sony is apparently unfazed by Amazon.com's recent entrance into the electronic book reader market. "The Kindle has helped," Glasgow said. "I think the (Sony) Reader market needed a boost. We're selling more since the Kindle came to market."

Pioneer plans to let someone else make its plasma TV panels, according to several reports.

Reuters reported Tuesday that the company will cease production of its own plasma panels because that portion of its business continues to lose money. The company will still sell plasma sets, but plans to get its plasma panels from Matsushita, parent company of Panasonic, the Nikkei business daily reported. Panasonic is the biggest plasma TV vendor in the world, shipping nearly 40 percent of all plasma displays, while Pioneer ranks fifth, shipping just over 6 percent of plasmas worldwide in the fourth quarter of 2007, according to DisplaySearch.

(Credit: Pioneer)

So far, Pioneer isn't confirming or denying the reports ("Our headquarters are planning to publicly discuss our TV strategy at the end of this week, so we'll have no information until then," said a spokesperson), but it doesn't look good.

As CNET colleague and resident TV expert David Katzmaier put it, this news amounts to "a black day for black levels."

Pioneer has been repositioning its plasma business over the last few years as a premium brand, most recently pushing its "Kuro" technology, which emphasizes deep black levels and contrast, at CES 2007 and 2008. CNET Reviews ranked the 50-inch plasma from Pioneer as "the best it's ever tested" last year.

Though it appears Pioneer will continue to sell plasmas sets, if it's not making the panels, it seems unlikely that it will prolong the life of its Kuro technology. Pioneer is, however, already planning to buy liquid crystal display panels from Sharp in order to start selling LCD TVs. LCD sets have quickly become the fastest-growing TV technology, displacing traditional cathode-ray tube sets, as well as rear-projection and plasma.

Hitachi is wielding a new weapon in the television market. Namely, automotive engineers.

The frame on the 35-millimeter-thick LCD TVs that the Japanese manufacturing giant will showcase at the Consumer Electronics Show in Las Vegas next week is made out of a polycarbonate from the company's automotive division, according to Bill Whalen, director of product development at Hitachi. Because the TV is thinner than most LCD TVs that size, it requires a stronger, more rigid frame, which the polycarbonate made possible.

Most people don't know Hitachi has an automotive company. "But if you have a fuel-injection system in your car, it is probably from Hitachi," Whalen said.

Hitachi automotive engineers and employees in the medical device group pitched in on creating these slim TVs.

(Credit: Hitachi)

As a finishing touch, the TV engineers took the polycarbonate to Hitachi's industrial design group. This group adopted a translucent version of the material and put a silver metallic layer underneath the TV frame to give it an unusual color undertone.

The TV also sports a light diffuser that comes from Hitachi's medical equipment group, a florescent backlight with an external electrode from another division, and a slim power supply specially designed by the conglomerate's component group.

"You can't just go off the shelf and buy a power supply like that," he said.

Hitachi's supercomputing group, meanwhile, contributed its know-how with a program that analyzes and simulates air flow. The program is used to help computer engineers remove heat from the inside of computers. The same principles can, and were, used on the TV.

Technology scavenger hunts like this will play a key role in Hitachi's efforts to expand its worldwide market share in electronics. Although a long-established brand, Hitachi often gets overshadowed by Sony, Philips, and Samsung. (Hitachi is ranked fourth worldwide in plasma, but is not in the top five in the larger LCD market, according to DisplaySearch.)

Approximately two years ago, however, the company reorganized. One of the primary goals of the reorganization was to better exploit the technology and components being made by the different divisions of the company, which pulls in $90 billion a year in revenue.

The 35-millimeter-thick TVs, which will hit the market in 2008 and have screens that measure 35 inches and up, are the first products to come out of this process. Internally, the company seems happy with the results. Designers first came up with the idea of doing a slim TV like this. Upper management approved the idea. The TV engineering group, however, claimed it couldn't be done. The company's executive team told them to shop around a bit and try harder, said Whalen. (Technically speaking, the TV is actually a display because the TV tuner is on the outside, but the effect is the same. You still watch programs on it.)

Next up will be a series of LCD TVs measuring 19 millimeters thick. Prototypes with 32-inch screens, which are expected to hit the market in 2009, were shown off at Ceatec in Japan in October. Slim TVs also weigh less than standard LCDs. Because Hitachi has been one of the primary backers of plasma TVs, these sorts of component and engineering tweaks will likely come to those TVs too.

The company will primarily concentrate on the upper end of the price range in TVs.

"Consumers are looking for lifestyle designs," said Daniel Lee, vice president of marketing for Hitachi America.

Update--Vizio stunned the consumer electronics world when it became the No. 1 seller of flat-panel TVs in North America.

But it may be only a temporary victory.

(Credit: Vizio)

During the second quarter, Costco and Sam's Club, the two primary retailers of Vizio TVs, asked the company for more TVs than normal to increase their own inventories, according to a Vizio spokesman. The store chains typically had been carrying one to two weeks of inventory. They requested that the inventory be increased to three to four weeks. (Costco, by the way, declined to comment.)

As a result, Vizio experienced a sudden acceleration in sales. Look at the second quarter numbers released in August by analyst firm DisplaySearch. In the second quarter, Vizio saw unit shipments of flat-panel TVs--which includes plasma and LCD TVs--increase 340 percent from the first quarter in 2007, a whopping jump in three months. Market share jumped from 8.8 percent to 11.9 percent.

Samsung, meanwhile, saw growth of 67 percent in flat-panel TVs for the same period, but saw market share decline from 14.4 percent to 11.3 percent. The other name-brand manufacturers grew at slower rates or even saw sales shrink. The market as a whole grew by 65 percent. Vizio, thus, was growing at more than five times the market rate. (Again, these numbers only reflect North American sales. Samsung is still No. 1 worldwide in LCD TVs and TVs overall.)

Meanwhile, iSuppli said that Vizio sold 606,402 LCD TVs in North America in the second quarter, a 76 percent jump from the first quarter. That put Vizio in first place among LCD TV vendors, with a market share of 14.5 percent, up from 9.4 percent, or fifth place.

Isuppli counts sales in to retailers, not out to consumers.

With inventory now at the levels requested by the companies, sources--at competing TV companies--allege that Vizio will see sales flatten out this quarter.

Does that mean the company will drop to second place or lower? It's hard to say, but there's a really strong chance. We will know soon because iSuppli and DisplaySearch are due to come out with third quarter numbers later this month.

"It likely will," said Riddhi Patel, an analyst with iSuppli, in a call after the story posted. Vizio also added Wal-Mart, Sears and K-Mart as customers in that quarter, so there was a lot of channel stocking activity.

Still, the company is enjoying a surge of interest among consumers because of its low prices. The company's TVs typically sell for less than similar-sized TVs from Sharp, Sony or Samsung.

It was growing rapidly, after all, even before the inventory changes. Two years earlier, in the second quarter of 2005, Vizio was ranked No. 15 in North America. In other words, not all of the TVs it shipped went into inventory at Costco.

The company may potentially benefit from further unanticipated inventory changes. The inventory of Vizio TVs remains below the inventory levels the stores carry for other vendors, according to the company. Seven or more weeks is normal for other vendors, said Vizio. Thus, the retailers may ask the company to boost inventory, which could then allow the company to rebound from a third quarter decline.

Then again, the established players haven't exactly taken kindly to the success of Vizio and other "silver box" TV makers. At CES, many of the major companies were somewhat dismissive of the small fry. Although the big companies do have better reputations for quality and service, price catches the eyes of consumers.

You can expect to see aggressive prices this holiday season. Hitachi recently told me that it will ramp up its marketing operations in the U.S. to gain more share in TVs.

By the way, tip of the hat to Gary Merson of HDGuru, who told us that it would be worthwhile to look into the inventory issues.

CHIBA, Japan--Sharp, Hitachi and JVC are taking the bulk out of large LCD televisions.

All three manufacturers are showing off LCD TVs here at Ceatec this week with panels that are less than an inch thick. The TV stand and the electronics add bulk, but the electronics can be put in the base of the stand or in a unit that connects to the TV wirelessly.

Hitachi's groovy slim TVs--a red one and a side view of a white one.

(Credit: Michael Kanellos/CNET News.com)

Hitachi had the thinnest. It showed off a 32-inch TV with a panel that measured only 19 millimeters thick. Sharp showed off a 52-inch TV with a 20-millimeter thick panel. There are 25 millimeters to an inch. A typical thin LCD panel on the market today is a couple of inches thick, according to Hitachi.

JVC's was the thickest of the three at 22 millimeters, but the company also likes to point out that it will be selling its thin LCD TVs this spring. The sets will start at 42 inches and get larger from there. Hitachi won't come out with its TV until 2009. Sharp has been vague about when it might release its thin LCD.

All three manufacturers are fairly vague about how they accomplished their respective feats. Hitachi says it's the light source it's putting in the TV. However, the company won't say what the light source is. JVC is using a fluorescent light source, not LEDs, but it won't get more specific than that.

Everyone is also tweaking the performance of their TVs in other ways. JVC, for instance, showed off a technology for reducing image noise in LCD TVs. Software in the TV creates a 3D simulation of images coming across the TV. It then tweaks the 2D image that will come across the TV to you by data it obtains in the 3D simulation to make a more accurate image.

Hitachi, meanwhile, said it will try to make a lot of news at the Consumer Electronics Show in Las Vegas in January. The company wants to move upmarket in TVs by emphasizing, among other factors, industrial design.