“It’s wrong to allege that the CRT will disappear within one year, but we should also realize the trend that sales volume of the CRT is shrinking while that of LCDs is gradually increasing,” Ma said.

However, flat TV makers have yet to become sufficiently profitable. Among multinationals, only a few, such as Samsung, are.

Xiamen Overseas Chinese Electronic Co. Ltd. (XOCEC), one of the first Chinese TV makers to embrace flat TVs, has seen its sales revenue grow rapidly in the recent two years through both domestic and overseas sales of flat TVs, but it didn’t make much money in this field. In the first half of this year, XOCEC generated profits of 44.57 million yuan, but color TV business only contributed 8 million yuan.

A report by IT Time in China showed that Hisense, which shifted to flat screen TVs at the same time with XOCEC, realized 100 million yuan of profits in 2005. Of the total, CRT contributed 120 million yuan while the flat screen TV business lost 20 million yuan. In the same year, Changhong and Skyworth, whose CRT business occupies the leading market shares, generated profits of 245 million yuan and 271 million yuan respectively, while their sales volumes were similar to the much less-profitable Hisense.

So most of color TV makers are aiming to achieve the right balance between developing flat screen TVs and keeping to their advantages in CRT.

Guo Dexuan, General Manager of Changhong Marketing Co. China, said that under the structure of Changhong’s color TV business, the mature CRT TVs are still the major source of profits, but Changhong Digital Flat Display Co. must be the future income source. He estimated that this year, net profits of Changhong may reach 500 million yuan, of which 400 million yuan come from the color TV business and CRT TVs will contribute 95 percent to the profits generated by that business.

Fan holds that different types of display have different target audiences and these display technologies will be supplementary to each other instead of substituting each other.

“Therefore for quite a long period of time, competition among CRT, LCD, PDP and other types of display will exist,” he said.

Kinescope concerns

It is color kinescope makers who feel the greatest pressure from the potential eventual extinction of CRT TVs.

If CRT TVs exit the market, CRT color kinescope makers would be the first stricken. They understand the situation better than anyone else. This is substantially different from the strategy of CRT TV makers.

Yu Zhiqi, Chief Engineer of Novel Color Picture Tube Co. Ltd., points out that with more than two decades of continuous investment, China has become the largest CRT producer in the world, establishing complete industrial chains from CRT materials to color TV manufacturing. Every year, China can produce 60 million CRT kinescopes and 60 million CRT TVs.

Nevertheless, all these brilliant achievements will become history as technology is upgraded. The Chinese CRT industry worries it will meet the same fate.

In recent years, many Chinese color kinescope makers have reduced their output. Novel Color Picture Tube Co. Ltd. closed two of its four assemblies. Thomson Foshan CPTC Ltd. and Dongguan Fortune Group were sold to an Indian company. Thomson Foshan also has shut down one of its two assembly lines. Shenzhen Electronics Group Co. Ltd. (SEG) also plans to reduce its production capacity.