March 8 (Bloomberg) -- Canon Inc., the world's biggest digital camera maker, and Toshiba Corp. will delay sales of a new type of flat-panel television until the fourth quarter of 2007 to lower production costs and retail prices.

The companies will begin mass production of surface- conduction electron-emitter displays, also known as SEDs, in July next year, they said in a faxed press release today. Toshiba, Japan's biggest chipmaker, initially wanted to start selling the product this year. Canon said in January it wasn't in a rush and was aiming for sales to begin this ``summer.''

``It will be more difficult for them to compete if they keep on putting off the launch,'' said John Yang, an equity analyst at Standard & Poor's in Tokyo who has a ``strong buy'' on Canon's stock. ``The market for flat panels has become a supply game of how many, how big and how much.''

Canon and Toshiba will be competing against Matsushita Electric Industrial Co. and Sony Corp., the world's two biggest consumer electronics makers, in the $85 billion flat-panel display market. The new entrants are trying to match prices of liquid-crystal and plasma televisions, which have fallen between 20 and 30 percent in the past year, according to manufacturers.

Canon and Toshiba, which plan to invest 180 billion yen ($1.5 billion) on the joint production, will sell the panels separately under their own brands.

``We aim to offer a product that can compete in price.'' said Hiroshi Yoshinaga, Canon's Tokyo-based spokesman. ``We expect the market for flat-panel televisions to rally around the 2008 Beijing Olympics.''

To contact the reporter for this story: Aiko Wakao in Tokyo at awakao@bloomberg.net.

Last Updated: March 8, 2006 03:32 EST