Until recently, there was an industry-wide consensus (at least in the trade press) that Sony may have committed a strategic error in continuing to manufacture the bulkier CRT models of HD and ED units, while its competitors were getting into flat-screen architecture in a big way. However, the Japanese firm is apparently making a rebound somewhat faster than most financial analysts had foreseen.

Sony happily revised its initial forecast of suffering a quarterly loss for the first time in a decade, instead, to project an 18 percent profit. The turnaround is largely based on healthy sales of its new Bravia flat-screen sets and its PlayStation gaming console (with a next-gen model coming out soon to take on the Xbox 360). Profits rose to $1.46 billion in the fourth quarter of 2005, according to published reports. Some analysts warned Sony that its rebound could be short-lived due to the current climate of cutthroat flat-screen competition.

Also, Sony is in talks with Samsung of South Korea about how to jointly produce more flat-panel LCDs and rush them to market in the next couple of years. Reported options include the both firms jointly building a second LCD plant in South Korea, although Sony is playing down that move for now.