Increasing demand for the higher margin LCD and plasma televisions is putting the smiles back on the faces of vendors and distributors.
In the Middle East, consumers in the UAE have been one of the fastest to adapt to the relatively new technologies coming through in televisions.
"LCDs and plasma televisions are driving up sales in markets as diverse as Japan, Western Europe and Australia.
"As for the UAE, and particularly Dubai, the high demand has taken many vendors by surprise," said Haruki Hirose, Dubai-based general manager of Hitachi's Home and Life Solutions Inc, the Middle East office.
"Consumers in the middle and top income bracket have been quick to make the transition."
With retail prices for LCD televisions starting at Dh8,000 and those for plasma at Dh10,000, their profit margins carry quite a wallop. And they should remain so for the immediate future. "I do not see any softening in these prices for at least the next year or so as supplies are still on the shorter side," said Hirose.
"For Hitachi, it makes perfect sense to shift our focus to the high-end products such as these. The conventional television market is now dominated by Chinese and Korean manufacturers, and margins remain very tight there."
Elsewhere in the Middle East markets - Saudi Arabia for instance - have not been as responsive in their early adoption of the new technology. But that could change in due course.
In the meantime, Hitachi is pushing its range of white goods, helped by sustained demand emerging from areas such as Iraq.
In its latest results, the Middle East fetched sales of $100 million, with forecasts of this rising to about $170 million in the next three years.
Meanwhile, Hitachi's white goods plant in Thailand, which meets most of the requirements of the Middle East and other Asian markets, will be expanding capacities on product lines such as refrigerators and air conditioners.
Exports from Thailand provided Hitachi with $700 million for the 2003 financial year through a 40 per cent growth.
"We have decided in principle to expand capacities, though the schedule is yet to be drawn up," said Shingo Tsuneyoshi, president of Hitachi Consumer Products (Thailand).
The existing capacity is one million units annually for washing machines and 800,000 units for air conditioners.
Thailand is also the base for Hitachi's venture with IBM for IT components. As for Dubai-headquartered Eros Electricals, the local Hitachi distributor, progress has been made in expanding into some neighbouring markets.
It has set up direct operations in Doha, while the one in Bahrain is through a distribution arrangement. In Muscat, it has made a direct entry. "We have so far not made any plans for Saudi Arabia," said A. Khan, senior divisional manager at Eros Electricals.
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