High-end TVs, including projection TVs, on the rise

High-end TVs, including projection TVs, on the rise

Rudijanto, Contributor, Jakarta

Projection TV producers and distributors expect better sales
this year as many people want to see the news on the general
election as well major sports events, such as Euro 2004 and the
Olympics, on bigger screens.

Unlike the pessimistic attitude of many other business
sectors, the general election has turned out to be a powerful
generator for TV sales here, including projection TVs, as the
day-to-day news and reports of the country's first direct
presidential election are of great interest to most people.

Various TV manufacturers have reported that the demand for all
types of TV sets have been increasing since December 2003, with
peak growth occurring in the months of January and February 2004.
PT Sharp Yasonta Antarnusa Indonesia (Sharp) even says that they
have run out of stock due to the robust demand.

Out of a total of 2.8 million TVs sold in 2003, projection TVs
are estimated to account for about one percent. This year's total
TV set market is forecast to reach 3.2 million units with
projection TV sales expected to rise to 1.5 percent.

The manufacturers of projection TVs express optimism that
sales will keep increasing as their prices are becoming more
affordable. For instance, the price of an LG 43-inch projection
TV this year has come down to Rp 10 million (about US$1,200)
compared to last year's price of Rp 13 million.

Aside from the strengthening of the rupiah against the US
dollar, the tight competition among the various major players is
another important factor in the decline in prices.

"I have heard that at Carrefour supermarkets, a number of
Japanese projection TVs are being sold for between Rp 7 million
and 8 million," said Gino Sugianto, Sharp's sales and marketing
director.

PT LG Electronics Indonesia (LGEIN) admits that his company is
having a relatively tough time in the market mostly due to the
price factor. The company's sales and marketing manager, Sung
Khiun, is of the opinion that the price differences may be due to
the fact that some importers are not paying taxes, such as sales
tax on luxury goods (PPnBM) and value added tax (PPN).

"These types of importer control approximately half of total
market share. Their prices can be about one to two million rupiah
cheaper as they have not paid import taxes," said Sung Khiun.

In spite of such hurdles, he believes that LG projection TVs
still have a bright future here. Although not in the near future,
Sung Khiun is confident that projection TVs and other flat
digital TVs will eventually replace the conventional TVs that
still dominate the market.

"Our optimism is based on the fact that more and more people
are choosing wider screen TVs with their huge, crystal clear
pictures for their favorite programs, such as the major sports
events coming up this year. One must not forget the major
political event, I mean, the upcoming general election," said
Sung Khiun.

Aside from LG's Flatron Projection TV, the RT-54NA11, with
54.49 and 44-inch screens as well as the RT-62NA31RB with a 62-
inch screen, LG also offers the latest in wide-screen TV, the
MDPTV (Multi Display Projection TV).

Another major player in the projection TV market, PT Philips
Electronics Indonesia (Philips), is also optimistic. Philips'
product manager for the marketing of CTV, Didi Rahardja, has set
himself the target of maintaining Philips' place as the top brand
in the projection TV category.

Currently, Philips is marketing two projection TV models on
the Indonesian market: the Philips 43PP421 and the Philips
50PP8421. The two variants are sold at Rp 12.2 million and Rp
16.6 million respectively.

Meanwhile, PT Sony Indonesia (Sony) has just launched two new
projection TV products, namely their 43-inch projection TV, the
KPFX432, and their 53-inch projection TV, the KPFX532, priced at
Rp 15 million and Rp 20 million respectively.

"We launched these new products in January. They have sharper
pictures compared to the previous generation," said Sotya Dewati,
an assistant to Sony's TV Product Supervisor.

Noting the currently good demand for projection TVs, Sharp's
Gino admitted that his company should enter the market. As a
salesman, he believes that such products would undoubtedly boost
the company's sales figures.

"We produced projection TVs ten years ago with LCD screens,
which have better pictures. But the problem was the high retail
price at the time. That is why we decided to concentrate on LCD
TVs" said Gino.

Compared to projection TVs and even to plasma TVs, Gino said
that Sharp's LCD TVs have better quality pictures and incorporate
more advanced technology. Sharp currently markets its AQUOS brand
for all of its LCD TVs in the Indonesian market.

"TV technology has developed a lot from the days of
conventional TVs. After that came all sorts of new technology
like projection TV, plasma TV, while the most sophisticated is
the LCD TV. That is why the prices of LCD TVs are more expensive
than plasma TVs. For instance, the price of a 37-inch plasma TV
is around Rp 30 million, while an LCD TV of the same screen size
can cost Rp 43 million," said Gino.

The price of projection TVs meanwhile are far lower than
plasma TVs. The price of a 37-inch Plasma TV, which is about Rp
30 million, is more than double than that of a 43-inch projection
TV, which costs between Rp 9.5 million and Rp 15 million.

"The price of projection TV's are much lower because their
technology is actually very simple. It is just a TV projector
that is projected from behind," said Gino.

However, there is no doubt that projection TVs are more
popular in Indonesia due to their affordability. That is why two
electronic giants, Samsung and LG, have decided to boost the
production and sale of projection TVs in Indonesia.

Samsung brought projection TV technology to Indonesia in early
2003. The company now produces approximately 1,500 projection TV
units per month. Last year, Samsung grabbed 13 percent of the
total TV market share in Indonesia. This year, the company is
targeting 20 percent of market share.

Last November, LGEIN opened its fourth TV production line in
its Tangerang factory. The new US$1 million line is set to
produce 12,000 projection TVs per year and is expected to boost
the company's market share in Indonesia from 10 percent to 20
percent this year.

LGEIN's president director Young Ha Kim said that the new
production line was expected to boost the company's market
penetration here given the growing popularity of the product.

"We are planning to expand our market for projection TV to
outside Java, for instance to Sumatra and Kalimantan. The problem
is that the stores there have not enough space to display such
high-end products. But we try to assist by supplying them with
display racks," said Sung Khiun.

Sung Khiun believes that markets outside Java have great
potential for such products based on the positive responses from
consumers buying high-end products during LG's exhibitions in
those regions.

"The market, in my opinion, has not been informed sufficiently
about the existence of these high-end products. It is our task as
marketing people to shift the consumers' attention to our
products. We do believe that a lucrative market can be created,"
said Sung Khiun.

Of the various business sectors in the country, 2004 seems to
be particularly promising for manufacturers of and dealers in
projection, LCD and plasma TVs. The increase in sales figures
notched up so far this year is one legitimate reason for
optimism.