• Wall Street Journal, Tuesday, January 20, 2009 11 AM

Larger flat-panel television manufacturers such as Sony and Samsung are starting to squeeze out smaller rivals as sales slow and profits decline, Daisuke Wakabayashi and Christopher Lawton report. Revenue in the sector is forecast to drop 18% this year.

Discount brands like Vizio and Westinghouse took the market by storm several years ago with aggressively priced models. But the more established TV makers are matching their prices, although Laynie Newsome, Vizio co-founder and vice president of sales, says she's not feeling the heat; indeed, her company is gaining market share. "We have already been aggressive at passing on price reductions. It's a race to zero ... We are here to stay," she says.

Second-tier Japanese brands such as Hitachi and Pioneer, however, are definitely struggling to compete on price and selection and are losing valuable floor space at stores. "The big companies like Sony and Samsung have the resources to sustain very low or even negative profit levels for a short period of time and force some of the smaller brands out of the marketplace," says Paul Gagnon, director of North America TV market research at DisplaySearch.

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