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Electric Japan: A yen for digital TV

Are Japanese companies set to make a killing?

Once a country decides to stop analog broadcasts, viewers must buy a digital converter box to upgrade their TVs. Ideally, they toss the old set and swap in a new, digital-compliant model, often a pricey flat-screen LCD or plasma if they can afford it. Such trade-ups could represent a big upswing for display manufacturers like Sharp, one of Japan’s flagship exporters. “This product is extremely important to our business,” representing a quarter of overall revenue, said Sharp spokeswoman Miyuki Nakayama.

Sharp expects to sell 660 billion yen ($7.3 billion) worth of TVs this year, down from 729 billion yen worth ($8.1 billion) last year as the global recession continues to pummel consumers around the globe.

Latin America is still a small market for Sharp, which is concentrating on China and other countries like Russia and India, Nakayama said. Only 1 percent of Latin Americans are able to receive digital broadcasts now, and the first country in the region to shut down its analog signals, Brazil, won’t do so until 2016, said analyst Paul Gagnon, director of North American TV research for DisplaySearch.

But the Japanese standard may not mean better play for Japanese products. Manufacturers like Sharp and its foreign competitors make TVs for all the standards depending on where they will be sold. And the standard won’t confer an advantage on its home country’s manufacturers for long, noted Gagnon. As silicon universal tuners become widespread, any digital TV will work on any standard.

Then the game resets, becoming once again a branding contest.