Cheaper Widescreen Sets On The Horizon?By Greg Tarr

If you have your eyes on one of a handful of new widescreen, picture-tube-based digital televisions now coming to market, you may want to cross your fingers and hope that government trade regulators do nothing for the next three months. That's because a long-running anti-dumping duty on picture tubes imported into the United States from off-shore factories is due to expire at the end of the year. If, as generally expected, the duty is not extended into the new millennium, some observers say more manufacturers may be encouraged to bring widescreen 16:9 (1.78:1) picture tubes into the United States for standard-definition and high-definition television sets and monitors. Then, if normal patterns are followed, that will lead to increased supply, greater competitive pressure and eventually lower prices for the bright, flashy beauties. To date, only a few manufacturers, including Panasonic, Sony and Princeton, offer widescreen direct-view digital displays or integrated sets in the United States. These - surprise, surprise - are typically pricey, with street prices ranging from about $4,000 to over $8,000. They are also hard to find. Although widescreen tube sets typically don't offer as much resolution as many HDTV-capable projection sets, they do produce significantly higher brightness and contrast levels, which can create the impression that pictures are clearer and more vibrant than those of their jumbo-screen counterparts - particularly when showing HDTV programming. They also take up less room, making them more suitable for smaller rooms and apartments. Cheaper analog sets, too?In case you are thinking this also means the prices will be coming down on that 32-inch or 36-inch analog television you may want, guess again. Most leading TV set manufacturers are already making tubes in the United States or in Mexico, where, thanks to the North American Free Trade Agreement (NFTA), dumping duties no longer apply. The cost of shipping tubes that large overseas to compete with North American-made tubes is too high to make subsidized pricing (dumping) pay off, even without the duty, manufacturers say. This duty adds an average of about 5 percent to the cost of the tube - the exact amount, however, varies greatly by manufacturer, country of import, importer, etc. Widescreen tubes are another matter. These cost so much to produce in small quantities that importing is the only viable solution for most. Take away the ""dumping duty"" and it becomes even more viable. For example, Toshiba, like several Japanese manufacturers, makes widescreen tube sets in Japan but has opted not to bring them to the United States yet. Steve Nickerson, Marketing Vice President for Toshiba America's operations, says this could change next year. ""I don't think the expiration of the dumping duty will lead to price reductions for direct-view televisions in general, but I do think you will start to see products that are niche items ... start to be become more readily available,"" Nickerson says. ""Companies that aren't willing to spend the money to produce the tubes over here now may start to say, 'Let's bring in some tubes and see how we can help to drive this market.'"" Tooling up to make such tubes in the United States is an expensive and risky undertaking, because demand is expected to be small for several years. So far, only Thomson (RCA and ProScan) has announced plans to produce 16:9 direct-view tubes here. In fact, it is making a 38-inch-wide picture tube now at its Marion, Indiana, plant and will market its first 16:9 direct-view integrated HDTV set and HDTV-ready monitor later this year. Others, including Sony, Panasonic and Princeton, have chosen to import tubes from Asia. Smaller brands Daewoo and Konka are also expected to offer widescreen direct-view models later this year or early next year. Sony, which makes its flat-screen 4:3 (1.33:1) FD Trinitron Wega tubes at a factory outside of Pittsburgh, imports the widescreen version used in the KW-HD1 HDTV set from Japan. Panasonic also imports its flat-faced widescreen ""Tau"" set from Japan. Ironically, Princeton imports widescreen picture tubes that it purchases from Toshiba's Asian factory. Why an anti-dumping tariff?Dumping duties were imposed years ago at the behest of what were then American-based television manufacturers who feared that Japanese and later Korean manufacturers were exporting picture tubes into the United States below cost. This was done, those dearly departed American makers said, to help their American sales companies gain a foothold in the U.S. marketplace by selling aggressively priced merchandise. Guess they were right. The measure was renewed for five- to seven-year cycles, with the last renewal slated to expire at the end of December. If the International Trade Commission fails to act on the matter, it will lapse. Some manufacturers say the original purpose for the duties no longer exists. Virtually all of the television manufacturers are today predominantly foreign-owned companies, so there is no U.S. industry to protect. Additionally, the risk of the loss of American jobs in foreign-owned factories is very low, because it is still more cost-effective to make large tubes here than to ship them into the country. Meanwhile, the one company with the most to gain by having the duties renewed is Thomson (now owned predominantly by French interests). The company so far is the lone U.S. producer of widescreen direct-view tubes. According to Dave Arland, a government affairs spokesman for the company, ""Thomson, Philips and others have rather vehemently argued in the past that those orders need to stay in place because we are large producers of picture tubes here in America."" Stay tuned. On a related government inaction matter: The news is a little greener for the 13-inch television category. On July 1 of this year, the Federal Trade Commission (FTC) corrected some problematic legal language that forced the continuation of a pointless 5 percent tariff on 13-inch televisions for the past five years - even though no one has made the commodity TV size in the United States for some time. The story goes like this. Back in 1994, several Asian countries, where most of the U.S. supply of 13-inch TVs is made, successfully petitioned the United States to drop its import duties for 13-inch television sets. U.S. negotiators during the GATT (General Agreement on Tariffs and Trade) talks agreed that the United States no longer had a 13-inch television business to protect and put into law the discontinuation of the duty on that product segment. But, in the process of codifying the measure, the customs department erroneously stipulated that televisions with screen sizes measuring exactly 13 inches were now free of the import duty. Unfortunately, a television with a screen that measures exactly 13 inches diagonally does not exist. Most screens are actually slightly larger than 13 inches, meaning the 5 percent duty continued to be assessed. The result of the newly corrected measure is a cost saving to the manufacturer. Most vendors say they absorbed the added cost and don't expect to make adjustments in 13-inch TV pricing in the near future. Source: Etown.com