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Friday, November 26, 2004
Sony Unprepared for Flat TV Demand

Sony, the world's largest consumer-electronics group, is having trouble meeting soaring demand for flat televisions as its assembly lines did not gear up quickly enough, a senior official said on Friday.

"We are having trouble meeting demand in flat TVs," Chris Beering, president of Sony Europe, told Reuters in an interview, saying the assembly lines were working flat out. "I do not think there is overcapacity in assembly." There was no problem in the supply of the panels.

The bottlenecks at the Japanese firm's own plants come at an awkward time ahead of the Christmas shopping season, when 30 cents in every dollar spent by consumers on electronics goes on televisions, and much of that to the new flat TVs.

Beering said these were "anxious times" for Sony as it was busy catching up with Dutch rival Philips Electronics, which is leading the market for flat televisions in Europe.

Beering said that in the six months to end-September, Sony Europe's sales rose 5 percent, and a big factor behind the increase was flat television sales.

Sony had a market share in Europe of 15.8 percent at end-September, up 2.5 percentage points, compared to Philips' 18.8 percent. Beering added that since that month, new Sony products had caught on well, and Sony's market share was up.

A key component in flat screens is indium-tin-oxide (ITO), which is pasted on the glass. Surging demand for flat panel display TVs and monitors has driven indium metal prices to $900/kg, the highest level since 1939.

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