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The introduction of digital broadcasting of TV signals should allow domestic television manufacturers to greatly increase their profit margins over the next decade, according to the Ministry of Information Industry.
The market for digital TV sets and related products such as set-top boxes could be as big as 300 million yuan (US$36.15 million) annually by 2015, the year China will digitally broadcast all TV programs around the country, the ministry said in a statement.
"Chinese TV makers can acquire an estimated 50 percent slice of the digital TV set market at least," said the ministry. "The move to promote digital broadcasting will help domestic television makers yield higher profits than they can have by selling traditional television sets."
Currently, the average profit margin for producing traditional television sets is less than 2 percent, while the margin for digital sets can be as high as 10 percent.
Considering the future profit, many domestic television manufacturers have already kicked off their research and development work, with some companies already producing digital television sets. New products include projection TVs and liquid crystal display sets.
Almost all the leaders among China's 86 television makers, including Sichuan Changhong Electronic Co., TCL Holdings Co., have entered the market.
However, since digital televisions are still a high-tech product with a comparatively small production scale, retail prices remain high.
Currently, the averaged retail prices of a large-screen digital TV set tops 10,000 yuan (US$1200) in the domestic market, compared with about 3,000 yuan for a 29-inch traditional set.
"Not all domestic families are financially strong enough to purchase high-end TV sets," said Guo Minhui, a marketing official with Shanghai Yongle Household Electrical Appliances Co., a large electrical appliance retailer in east China. "But with the improvement of living standards and the nation's ongoing task to send out digital television signals, sales of high-end TV sets will increase."
"When the retail prices of digital TV sets are lowered in the next few years, it will become the mainstay product in the domestic TV market," said Sun Weimin, vice president of Jiangsu Suning Appliance Group, a major home appliance retailer.
(Shanghai Daily October 11, 2002)
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