Canon Inc will start selling flat- panel televisions using technology developed with Toshiba Corp as early as next year, challenging rivals such as Samsung Electronics Co for a share of the US$21.4 billion display market.
Tokyo-based Canon plans "to be among the winners in the near future when more people will be communicating through video" by developing its own display technology, chief executive Fujio Mitarai said in an interview in Tokyo.
Canon, which became Japan's fourth-largest company by market value this year after reporting a third straight year of record profit, is seeking to add new product lines to maintain earnings growth.
The company is a new entrant in the flat-panel market, where Samsung, Sharp Corp and Taiwanese companies such as AU Optronics Corp (友達光電) are investing billions of dollars in new plants.
"The company is investing in new business opportunities at a time when many Japanese companies are using the money they make to repay debt," said Makoto Sakuma, who helps manage ?100 billion (US$840 million) including Canon shares at Asahi Life Investment Management Co.
"That will make Canon even more competitive," Sakuma said.
Canon's entry to the flat-screen market highlights a push by the company to invest in new technologies and markets where it expects growth to be strongest.
Last month, Canon said it would put aside an undisclosed amount of money for mergers and acquisitions which it expects to complete in the next three years.
The money will be set aside as part of Canon's ?1 trillion (US$8.45 billion) research and development budget allocated for the three years ending December 2005.
The company has resisted following Japan's other large electronics makers such as Toshiba Corp and NEC Corp in cutting jobs and scaling back operations. Instead, the maker of IXY DIGITAL cameras has pared production costs by introducing new manufacturing methods.
The formula has proved successful. Canon's net income more than doubled in the first quarter ended March 31, helped by demand for its color printers and digital cameras. The company's shares have gained 28 percent on the Tokyo Stock Exchange this year.
Led by Mitarai, Japan's biggest maker of office equipment is also adding jobs. In the three months ended March 31, Canon's workforce grew by 1,071 workers to 98,873 employees worldwide.
"We haven't been laying off people and we aren't laying off people," Mitarai said. "The employees know that so they have high morale and feel safe working for Canon."
The new screen technology will provide comparable size and picture quality to existing plasma flat-panel screens while consuming only a third of the power and costing the same or less, the company says.
TVs using Canon and Toshiba's so-called Surface-Conduction Electron-Emitter Display can measure 40 inches diagonally and be less than 10cm wide -- comparable to existing plasma or liquid-crystal display flat panels.
They consume about half the power of bulky cathode-ray tube TVs while avoiding the limitations to picture quality of the glass tube-based technology, according to the company.
Canon wants to replicate the success of its inkjet printers with its flat-panel business, which it aims to have annual sales of ?100 billion, Senior Managing Director Ichiro Endo said in a separate interview.
"The picture quality of SED will be better than existing liquid-crystal or CRT displays, but we will keep the price at about the same or even lower" than older technologies, he said.
Canon and Toshiba agreed to co-develop the display technology in June 1999. They said then they would set up a venture to produce the panels when the technology was ready.
South Korea's Samsung was the world's biggest seller of flat panels, also used in computer monitors and cellphones, last year, according to Texas-based DisplaySearch. The market will be worth US$21.4 billion this year, DisplaySearch forecasts.
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