2004 will be a breakout year for both plasma television and microdisplay-based rear-projection TV, according to U.S. market forecasts issued to reporters touring Hitachi's manufacturing facilities here.
Hitachi Home Electronics marketing VP Leo Delaney added that significant strength would also continue to come from the traditional CRT-based projection TV market and direct-view LCD TV.
During a recent press tour of key production facilities here, Delaney said Hitachi is gearing up product lines — which will be formally announced in May — to reflect remarkable demand for plasma and micro-display-based rear projection in 2004. At the same time, the company will maintain a strong presence in the CRT rear-projection market. He said the latter category will not decline as rapidly as some other manufacturers predict.
Analyzing the market for flat-panel LCD and plasma TVs measuring 20 inches and larger, Delaney said the two segments were virtually neck and neck in unit volume in the worldwide market for 2003.
However, in the U.S. market, plasma products dominated LCD in terms of unit volume in the large screen sizes [342,000 vs. 27,000 units], "and we see that continuing, with demand equalizing around 2005," Delaney said.
"We feel the positioning for direct-view LCD will be as replacements for direct-view CRT televisions in the 27-inch, 32-inch and 36-inch screen sizes. Plasma in the U.S. marketplace will represent the 40-inch and larger screen sizes [with 550,000 units forecast for 2004]," he added.
Delaney called the U.S. microdisplay rear-projection TV market "very interesting."
Microdisplay PTV "emerged with such rapid market penetration that it surprised almost all manufacturers," Delaney said. "It certainly surprised us."
He said Hitachi was fortunate that it had earlier made deep investments in "a range of microdisplay technologies including LCD, and for the last 10 years it has been developing light engines for two-piece LCD projectors for both consumer and industrial market applications."
After first spotting the trend in December 2002, Hitachi very rapidly produced a range of products that were on sale in the United States by September 2003.
"The pent-up demand for large screen sizes in a form factor that fits into a wider range of environments, we think, is the driving force behind the high level of demand [for microdisplay PTV] in the U.S. market," he said.
According to Hitachi's estimates, 342,000 units were sold at retail in microdisplay in 2003, "and that was constrained to some degree by supply. It could have been larger, we think."
In the beginning of 2003, the percentage of total microdisplay projection units started at around 8 percent and ended the year around 22 percent, he said.
For 2004, Delaney forecast 1 million units of microdisplay products to be sold into the U.S. market out of a 2.9 million market for 40-inch and larger PTV.
"There are other manufacturers who are more optimistic than this — and have most of their business in that technology — who forecast 2 million units out of 2.9 million units being microdisplay. We think our number is pretty realistic."
Going forward, he estimated the microdisplay category will grow to 1.3 million units in 2005 and 1.625 million units in 2006.
Delaney said manufacturers around the world are lining up to get into the plasma and microdisplay categories because the contribution of dollar volume compared to unit volume remains very high.
"It is clear that both plasma and microdisplay provide a lot of dollars and a lot of incentive to develop the business," he said.
He said some 40 manufacturers offered about 100 plasma models at the start of 2003, and that is expected to grow to about 75 to 100 manufacturers selling more than 200 models by the end of 2004.
The story is similar in microdisplay PTV, he said.
"All these things say to us that it is a wonderful time to be in the plasma, the microdisplay PTV and the CRT PTV businesses," Delaney said.
As for CRT-based rear-projection TV, Hitachi issued a bullish forecast of 1.9 million unit sales out of the total 2.9 million-unit market for 40-inch and larger displays expected in 2004.
"We expect consumers will see these models as a tremendous value. They provide a high-level performance and prices are very reasonable and going down," he said.
Still, Delaney added that Hitachi focus group studies indicate "consumers are willing to pay more for new technologies. They are not insisting on prices being the primary consideration."
The 1.9 million CRT PTV units projected for 2004 will represent 55 percent of the market, according to Delaney's estimate. Microdisplay will represent approximately 1 million units, or 29 percent of the market.
Microdisplay models will be segmented into 40 percent DLP and 60 percent LCD, he said. The remaining 16 percent of the market will be plasma. The number of products based on LCoS "will be a relatively trivial number," he said.
In explaining why some categories, such as direct-view CRT and LCD, were glossed over, Delaney added, "We are keen on the three categories of products, which represent our businesses."