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Prices to plunge with demand for plasma TVs?

Plasma panels are losing flat-screen battle to LCDs, research shows. If history has a say, more price cuts are on the way.

It looks as if plasma is losing ground in the high end of the TV market.

Shipments of plasma panels--sheets of glass placed inside plasma televisions--rose only 3 percent in the fourth quarter of 2006 over the same period the year before and actually declined 4 percent from the third quarter of 2006, according to research firm DisplaySearch.

It was the first quarter that plasma panel shipments grew less than 47 percent on a year-to-year basis and only the second time since the first quarter of 2003 that there has been a sequential decline.

Plasma panel shipments were 15 percent lower than the suppliers' aggregate forecast and 9 percent below DisplaySearch's forecast.

The shortcomings can largely be attributed to a loss of global market share to LCD, or liquid crystal display, TVs smaller than 50 inches across diagonally, as well as to limited North American sales of LCDs larger than 50 inches across, the firm said. The shift resulted in an increase in channel inventories and reduced plasma panel demand.

The slide in plasma display demand came despite . Chances are, more plasma price cuts are on the way: historically, inventory overhangs lead to price cuts, so consumers could benefit.

DisplaySearch's research provides data for one of the lingering debates of the Consumer Electronics Show. Namely, what happens to plasma? Executives at Samsung Electronics and Royal Philips Electronics at the conference said the industry is at a point in which consumers really wouldn't care anymore.

Technologically, the two flat-screen TV types are about equal, said Lucas Covers, chief marketing officer at Philips. The real debate for consumers would be over aesthetics--how the TV looks--said John Revie, senior vice president of visual displays at Samsung.

Executives from LCD companies such as Sharp Electronics and Westinghouse Electric, however, said LCDs are already winning the 42-inch to 49-inch battle and that they would start to challenge plasma in TVs larger than 50 inches.

Even with the decline, Matsushita Electric Industrial (Panasonic in the United States) and Pioneer Electronics saw panel shipments grow in the fourth quarter at the expense of other competitors.