Asia's electronics giants hope millions of Chinese will splash out on new TVs and appliances for this summer's Beijing Olympics to help protect the industry from a slowdown in the United States, a major export market.

But they've been here before. The much-heralded 2006 soccer World Cup in Germany failed to deliver a flat-screen TV boom and led to a long, costly oversupply.

With that in mind, companies and analysts expect a moderate but broader-based impact from the Olympics in August.

Those in line to gain most from any Olympics windfall are TV and screen makers such as Samsung Electronics Co Ltd and Sharp Corp, as consumers swap out their bulky tube units for large, thin TVs to watch the Games.

Lifestyle choices and higher consumption standards are also expected to boost sales of home appliances and high-end mobile phones in China, analysts say.

HIGHER LIVING STANDARDS, LOWER PRICES

"The standard of living in China is set to rise sharply," said Nho Hwan-yong, executive vice president in charge of air conditioners at LG Electronics Inc.

To cash in on that, the world's leading maker of home air conditioners has launched a new air-con range designed by artists, some coloured in the bright red that is popular across China.

Lehman Brothers' James Kim noted that new, big TVs would be much more affordable now than in 2006.

"In 2006, flat-screen TVs were just entering the market and came with high prices," he said. "Now, prices are low enough to entice a larger customer base."

In 2006, 32-inch LCD TVs from Samsung, the world's biggest flat-screen TV brand, cost on average $1,125. Now the same-size Samsung LCD TV with high-definition features is priced at $800 by U.S. retailer Circuit City. In the non-premium segment, those 32-inch models are available for less than $600.

Research firm DisplaySearch expects LCD TV shipments in China to jump 70 percent this year to nearly 15 million units and plasma TV shipments to almost double to more than 1 million. It sees the global flat-screen TV market growing 29 percent this year. 

U.S. SLOWDOWN LOOMS

But those hoping for a dramatic jump in sales in the run-up to the Olympics will probably be disappointed, analysts say.

Bing Zhang, director of China market research at DisplaySearch, notes that pre-Games sales may lag expectations partly because the Chinese government cancelled May Day holidays, a major shopping season.

"The Beijing Olympics is the main driving force for China's TV market," said Zhang, but he added he did not expect second quarter growth to live up to forecasts.

And a looming slowdown in the United States, the biggest market for high-tech goods, casts a shadow over sales prospects.

"The Olympics can help sales, but it won't change the market fundamentals," said Lehman's Kim. "U.S. demand can fall short of expectations. It may endanger the industry's rosy outlook."

TV makers have ambitious targets for now.

Samsung aims to sell 21 million flat panel TVs this year, up from about 15 million in 2007. "The challenges will be to keep up the sales momentum after the Olympics," said Makoto Ebata, Hitachi Ltd's senior vice president. 

By Rhee So-eui

Source: Reuters