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.