But the situation has since changed, and some insiders predict that China's high-end TV market will take off this year, according to the Shanghai Evening Post.

Shanghai yongle Household Electrical Appliances Co. Ltd., a top local home appliance retailer, said it sold more than 1,000 projection TV sets and 500 PDP TV sets last month. In 2002, 10,000 PDP televisions were sold in China.

The sales boost is partly due to large-scale price cut in the high-end products, caused by rise in domestic production. The price of projection TV sets has declined by as much as 30 percent since the end of last year. At the same time, the average price of PDP TV has dropped 40 to 50 percent in the past one year.

Now, a projection TV is sold at around 10,000 yuan (US$1,205). Normal PDP TVs are priced at about 20,000 yuan, compared to an average 6,000 yuan for a large, flat-screen set.

"If the price of high-end sets falls further, the dominant role of flat-screen TV will be under threat," said a Yongle official.

Analysts pointed out that there is still scope for high-end TV makers to cut their prices since a growing number of Chinese mainland TV makers, including Sichuan Chang-hong, TCL and Skyworth, are now engaged in the business.

Meanwhile, the invasion of foreign TV companies is likely to spark another price war in the market.

Japan-based Sony Corp. announced last month that it would begin selling PDP TVs in China this spring. Its rivals, like Toshiba, Matsushita and Hitachi, have been selling PDP TVs in China for more than a year.

"China has the potential to become the world's largest marketplace for high-end TVs," said Seiichi Kawasaki, president of Sony (China) Ltd.

Sales of PDP TVs are expected to reach 80,000 units in 2005, according to Satoshi Okawa of Sony.

(Shanghai Daily February 8, 2003)