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LG Drops Blu-ray, LCoS, PMC From Lineup

LG Electronics notified dealers that it has dropped plans to ship a Blu-ray Disc player, its first LCoS rear-projection sets, a pair of plasma models and a family of Portable Media Center (PMC) products. Most of the products were due to ship this spring.

Instead of delivering the Blu-ray Disc player, LG told dealers it is instead working to develop a dual-format HD DVD/Blu-ray Disc player, which could come to market this fall.

In a memo to dealers from Bob Perry, LG sales VP, which LG sent to TWICE, the company said “in light of uncertainty in this early stage of the market for prerecorded high-definition optical discs, we have decided not to introduce the BD199 as originally planned for this spring.”

Perry had no further details on the dual-format player at this time. However, the announcement came shortly after LG’s parent company said it reached an intellectual property-sharing agreement with Toshiba for the development of next-generation optical disc drives, including HD DVDs.

Meanwhile, LG’s much-hyped PMC product also encountered “an unanticipated delay,” the notice said. “As a result, we will not make our March ’06 rollout timeframe. Because this market is so competitive and dynamic, we believe it is not appropriate to launch a partial lineup, so the delay in the PMC will delay the entire lineup” of portable media players planned for 2006.

LG said it will announce new rollout dates for the portable line as information becomes available. “In the interim, we are removing these models from our lineup at this time. We hope this change has not caused any inconvenience,” LG said.

LG had also withdrawn plans to market a pair of LCoS-based rear-projection TVs — models 71SA1D and 62SA1D — due to problems procuring LCoS chips. The delay is giving the company the chance to monitor and re-evaluate the shrinking micro-display rear-projection market for future participation, Perry said.

The models were to have been the first LCoS microdisplay HDTV sets for the LG line.

Meanwhile, Perry told TWICE the market for microdisplay rear-projection products has continued to decline as demand for flat-panel televisions has increased.

“Based on the growth in the large-scale plasma market as well as strong growth of LCD, there are serious questions about the size of the microdisplay market in the future,” Perry said. “We expect substantial shrinkage in the market for microdisplay products this year and next year we see even more dramatic shrinkage. So, there are serious questions as to the future viability of microdisplay as a TV format.”

The LCoS models were removed from the U.S. product lineup “to avoid negatively impacting dealer assortment and business planning,” Perry’s statement to dealers said, adding an announcement would be made if the company decides to reinstate the products.

In the meantime, LG will continue to market two DLP rear-projection HDTVs under the LG brand and two under the Zenith brand from last year’s line. Two new DLP models are planned for the Zenith line in June, the company said.

LG joins a list of manufacturers that had previously announced plans to market LCoS rear-projection sets, only to drop the products when display chips became difficult to obtain.

Exceptions have included Sony, with its SXRD products, and JVC with its D-ILA products. Both companies introduced new LCoS models last year that have done reasonably well in microdisplay market share surveys.

Product delays also reached the popular flat-panel TV category. LG said it had cancelled plans to market a pair of previously announced specialty plasma TV products. Models 50PB2DR and 60PB2DR were withdrawn “as a result of concerns expressed by dealers over market introduction timing, as well as engineering development schedules,” the dealer notice stated. “Instead, we will carry over the 50PY2DR and 60PY2DR models. We also plan to adjust market pricing on these models as the market moves. Dealers should continue to carry the popular PY2DR chassis in their lineups.”

Affected products were all part of a large lineup of new models introduced at an unusually early 2006 product line show that was held for dealers and press last fall. In part, LG said it had planned to use the accelerated schedule of the event to gather opinions on new products in time to make adjustments for spring and summer shipping dates.