2007 Preceding Period market analysis and outlook of the summer sales campaign

Expectation of home electrical appliance market and summer sale campaign

With the launch of the Windows Vista and the strong growth of TV sales, the home appliance market was running relatively well.

The total sales amount of 115 major items was up from 104.6% in February and 104.5% in March from the previous year.

In the flat styled TV market, the transition to larger monitor sizes went smoothly. 75% of LCDs were over 32V in size and 65% of plasma TVs were 40V based on the total sales amount. This transition would keep going and drive the market demand.

The large monitors with full-HD and “Synchronizing function₁” will be the center of this year’s sales campaign.

₁. “Synchronizing function” means that all of the home theater components can be operated by pressing a single button on the TV's remote control.

High-Definition, that is the new trend of Japanese market.

Beginning with TVs, the digital products have gradually changed to High-Definition (HD) models. Audio visual equipments will follow the trend next. See Figure 2.

According to one of the data using the total number of sales as the base, this May, the percentage of HD TV reached about 95% of the total sales.

Accompanied with HD TV sales, the sales of DVD recorders increased drastically from January to May this year. We can see the same trend in the field of digital camcorder.

The full HD TV category data was gathered separately. The diffusion of the full HD TVs is expected during the year-end sales this year.

The full HD TV sales represents 19.2% of all TV sales in terms of the number of units sold. Also the digital camcorder sales rose to 10% during May from March of this year.　As for the detail, see Figure 3.

TV tows audio visual market by Synchronizing Function

The “Synchronizing function₁” TV is becoming available. Panasonic and Sharp are playing the key roles in this trend.

In may, more than half of TVs sold had attached “Synchronizing function”, according to both the number of units sold (55.5%) and the sales (63.0%).

The majority of DVD recorders sold, which is strongly related with TV, also equipped “Link function” both the number of units sold (58.7%) and the sales (62.9%).

With the introduction of HD and Link models, TVs are now to drive the audio visual market including DVD recorders and digital camcorders.

Olympic and World Cup become detract from rate of growth

Although there is a big demand in market, the occasional dips in sales are occurring compared to the previous year.

Last year, we had many events such as Olympic or World Cup, so market demands was dropped radically this year in February and May. The sales was up 185.6% for plasma TVs and 152.1% for LCD TV previous year based on growth of sales ratio.

Therefore, the sales of Plasma and LCD TV showed a little decrease this year. The same trend was seen in the DVD recorder market.

We expect a decrease in the flat styled TV market in June this year, but the demand is still constant and recovered 125% up at the volume discount and 118% up in sales.

At digital camera market, we can expect a stable growth running at mid to high 110% ratio. However, after August, more useful function or price adjustments will be needed as key elements for the market growth.

Because of the World Cup this year, the demand of DVD recorders will probably increase as the HD TVs growth. We have to wait until August for a recovery of demand.