TOKYO — Sony is dropping its money-losing rear-projection TV business worldwide to focus on two flat panel technologies — liquid crystal display and organic light-emitting diode.

Sales of rear-projection TVs had been declining recently as LCD TVs gain in popularity and get bigger, Sony Corp. spokesman Shinji Obana said Thursday.

In October, Sony lowered its global sales forecast for rear-projection TVs — which uses a projector to create images on large screens — to 400,000 from 700,000, which is down from 1.1 million the previous fiscal year.

By contrast, Sony expects to sell 10 million LCD TVs this fiscal year through March, up from 6.3 million the previous year.

Sony sells 85 percent of its rear-projection TVs in the U.S., and about 10 percent in Europe, according to Obana. Production at the three plants that make the rear-projection TVs in Japan, Mexico and Malaysia, will be halted, Obana said.

The decision to abandon rear-projection TVs underlines Sony's strategy of focusing on LCDs and OLEDs at a time when competition is heating up in flat TVs.

In the fiscal half-year through September, Sony lost $526.3 million in its TV operations, partly because of losses tied to rear-projection TVs. Diving prices of LCD TVs also contributed to the red ink, Obana said.

The world's electronics makers are all working on LCD technology for TVs, as well as another technology called plasma display panels, or PDP.

Earlier this month, Sony began selling a small 11-inch TV that uses a relatively new but expensive flat-panel technology called OLED. Sony's XEL-1 measures just 0.12 inches thick and delivers clear, vivid images.

Earlier this week, Hitachi, Canon and Matsushita Electric Industrial Co., which makes Panasonic brand products, forged a tie-up in their liquid crystal display businesses — another sign of how Japanese electronics makers are being forced to work together to compete globally.

Sony has an alliance with South Korea's Samsung Electronics in LCDs.

Sharp Corp., another major Japanese LCD maker, formed a partnership with Toshiba Corp. last week. Under the deal, Toshiba will buy LCD panels from Sharp for its TVs.

Make a difference. Donate to The Advertiser Christmas Fund.