TCL announced that due to market competition, its contractual benefits in its TTE joint venture with Thomson Electronics would not be fully developed, since cost controls were just barely acceptable, making its performance in the European market fall below predictions. China Business News also reports that TCL Multimedia said that it too would miss expectations in certain areas. In TCL's third quarter report, the company expressed optimism that the last quarter of the year would make up for losses sustained in the first nine months. Taifook Securities of Hong Kong predicte that TCL's losses for the year would amount to HK$389 million.In the second half of the year, TTE's absorption of Thomson's operations in the European and American markets substantially increased the company's costs, putting the company into a hole despite excellent sales. TCL's TV unit sold 23 million units last year, with the European and American markets accounting for 3 million and the domestic market making up 10 million. Slim profit margins on finished LCD displays eliminated much of the benefit such strong sales could have brought. Taifook said that this year, TCL's migration to China of much of its overseas production equipment and non-core research, using more domestic parts in its TVs, and cutting sales costs could push profits back up, and it predicted that TCL would recover from its losses in 2006.Link: http://dycj.ynet.com/article.jsp?oid=7774644