"TV inventories are still at high levels, so prices are likely to fall," Senior Vice President Yoshihisa Ishida told reporters.

The industry had hoped that new technology on offer this year, such as 3-D displays, might slow the downward trend in TV prices, which have fallen by more than 20% per year over the past few years. But weaker-than-expected demand in the first half of the year has led to excess product stock, and TV makers worldwide are now under pressure to meet their shipment targets by slashing prices.

But Ishida said it was doubtful whether lower prices alone could drive a recovery in the U.S. market. "At this point, it is hard to tell whether the market will remain weak or pick up," he said.

Research firm DisplaySearch says it expects LCD TV shipments in 2010 to grow to 188 million units worldwide, up from 145 million in 2009, as strong growth in Japan and emerging markets offsets weakness in North America.

Another research firm, iSuppli, expects global TV shipments to accelerate in the second half of this year due to aggressive price cuts, even on products with new features such as 3-D TVs.

"Competition is quickly becoming very intense in the 3-D market," Ishida said.

The comments come amid Sony's continued attempts to turn around its TV business, which has been unprofitable for the last six straight fiscal years. The company's TV business did show black ink in the April-June quarter of this fiscal year, thanks partly to more outsourcing of production.

Despite the tough market climate in North America, Ishida said that Sony's new Internet-enabled TV sets released last week in the U.S., which run on Google Inc.'s (GOOG) Google TV software, are off to a "better-than-expected" start, though he declined to set any sales targets.

Ishida said the Internet TVs represent a new business model for Sony. Instead of making money by just selling hardware, the TVs can continue to generate revenue through downloadable software and paid content, he said.

For the time being, such revenue will come mainly though Qriocity, the company's newly developed content distribution platform to deliver digital entertainment services such as video-on-demand or music to consumers through its Internet connected devices.

The new Internet TVs come in four sizes, with prices ranging from $599 to $1,399.

Because other electronics makers' devices will also be able to use Google TV, Ishida said he expects rival TV brands to enter the market. In three years, about 70% of all new TVs may come with Internet connectivity, either by Google TV or other means, he added.

By: DocMemory
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