Pioneer said its group operating profit fell to about one billion yen ($8.3 million) during the six months ended on September 30, down from 5.8 billion yen in the same period a year earlier.

It predicted a group net profit of 6.5 billion yen for the year to March 1999, little more than half its earlier forecast of 12 billion yen.

Pioneer said despite hefty sales of DVD players and car electronics products in overseas markets, intense price competition in the company's major product markets sharply cut into its profits in the first half.

Foreign exchange gains and higher patent income, however, helped its first-half group net profit to increase by 40 per cent year-on-year to 2.9 billion yen, a Pioneer spokesman said.

"We see an increasingly harsh business climate, as indicated by the depressed Japanese economy and the unclear prospects of the world economy, along with intensifying competition both in Japan and abroad," Pioneer said in a statement.

The spokesman said swollen inventories of audio equipment at the parent company and slower-than-expected sales of plasma display TVs were also among reasons for reducing its full-year earnings forecasts.

Plasma display panel technology allows for larger screens without an increase in thickness, making it suitable for producing wall-hanging televisions.

But a high price tag -- more than one million yen per unit -- has deterred the technology's take-off.