Plasma Sales Slip in Early 2009

— -- Sales of plasma display panels are slipping, according to some new research released Tuesday. Plasma shipments fell by 22 percent in the first quarter of 2009 compared with the same period last year, according to a report by tech analysis firm DisplaySearch. From quarter to quarter, demand for plasma screens dropped by 28 percent.

Trouble in Plasma-Land

The decline is just the latest blow to a business that has experienced more than its share of buffeting recently: Just last month, Pioneer halted its plasma production; and in February, Vivio announced plans to back out of the market. Their motivation is not hard to understand, either: According to some estimates, manufacturers are selling seven times as many LCD units as plasma displays. And LG Electronics, one of only three major plasma-makers remaining in the field, is fighting off rumors that it's getting out of the game.

Worse yet, the plasma industry's attempts to persuade people to continue buying its products may be backfiring. In part because companies have been lowering their prices to encourage consumer purchases, DisplaySearch says, plasma-related revenues fell by 36 percent year-to-year over the first quarter of 2009.

Across the plasma market, Panasonic enjoyed the strongest performance this past quarter, snagging 37 percent of plasma panel shipments worldwide. Samsung came in second with 31 percent, and LG followed with 26 percent.

The reasons for the decline are multifold, according to DisplaySearch's Paul Gagnon. "It is a combination of things: Some lower demand, continued competitive pressure from LCD, and fiscal year-end panel maker inventory draw downs, which led to some shortages and the exit of several brands (Pioneer, Vizio)."

The Future of Plasma Sales

The best weapon plasma has in its battle against LCD may be size (which, in this domain, does seem to matter): Plasma displays in diagonal sizes of greater than 50 inches were the only plasmas to see significant growth during the early months of 2009. The larger-size models, analysts say, tend to be where plasma displays offer the most competitive pricing against LCD alternatives.

Industry experts expect to see plasma companies focus on technology improvements to score more sales in coming months. With the LCD market suffering losses of its own right now, it's far too soon to count plasma out.