Panasonic Corp's display business is on track for its
first profit in five years in January-March, driven by stronger sales of
liquid crystal display (LCD) panels for tablets and PCs, the head of
the division said in an interview on Thursday.
As Panasonic draws back
from money-losing TVs (it makes the Viera TV brand) it's looking to
boost sales of smaller LCD panels used in tablets and mobile phones, a
strategy also being pursued by rival Sharp Corp.
Sharp and Sony Corp have been battered by declining TV
sales and a strong yen that makes their products look expensive when
lined up against innovative designs from South Korean competitors and
others. Panasonic has warned it will lose close to $10 billion this year
as it writes off tax deferred assets and goodwill across businesses and
prepares for a restructuring. Finance chief Hideaki Kawai told Reuters
on Wednesday that a fifth of Panasonic's 88 business units are losing
money and only half meet a 5 percent operating margin target.
LCD panels will likely make up around 60 percent of the unit's sales in
the six months to March, double their first-half contribution, Yoshio
Ito told Reuters.
"We are now making displays for more than 10
models of tablets and PCs," he said in an interview at a former factory
in Ibaraki in western Japan, once the hub of TV production and now his
headquarters and a research and development centre.
again from LCD panels will help cover continued losses from plasma
displays, which are difficult to make in smaller sizes, Ito said, adding
the plasma part of the business would still lose money in
"It's a very bullish target," said Yasuo Nakane, an
analyst at Deutsche Securities in Tokyo, in reaction to the LCD profit
Ito and other Panasonic managers are under pressure from
new company president Kazuhiro Tsuga to raise their game. Tsuga has said
that any division failing to hit at least the 5 percent operating
margin target within three years will be shut or sold. From April, Tsuga
will begin weeding out the weakest among Panasonic's businesses - which
churn out a vast range of goods from fridges and shavers to solar
panels and batteries.
The success of tablets from Apple Inc's iPad and Samsung Electronics' <005930.KS> Tab to more recent offerings from Google Inc , Amazon.Com Inc and Microsoft Corp has created room for Panasonic's display business to decouple from TVs.
global tablet market should double this year to 113 million, industry
research firm Gartner estimates, and will top 300 million by 2016.
which sold most of its advanced Sakai LCD plant, which makes TV panels,
to Taiwan's Hon Hai Precision Industry Co Ltd and
converted another, at Kameyama, to making smaller displays, is fighting
in the same space, supplying Apple with screens for the iPad and iPhone
Sony, instead, is focusing on building its smartphone, camera
and game console division while nurturing new ventures such as medical
Panasonic's audiovisual division, which includes Ito's
panel business, lost 2.1 billion yen in July-September as sales fell 7
percent from a year earlier. For the full year, the unit cut its
operating profit forecast to 36 billion yen from a previous 121 billion
Panasonic shares, which have been trading around multi-decade lows, closed up 1.8 percent on Thursday at 395 yen.
© Thomson Reuters 2012