Sony has said it will no longer produce a flat-screen TV technology once seen as a rival to LCD and plasma displays.
Sony hopes OLED screens will re-invigorate its TV business
The firm said it will stop making rear-projection televisions in February 2008 because of falling demand.
Instead, it will focus on flat screens built using liquid crystal display (LCD) and organic light-emitting diode (OLED) technology, a spokesperson said.
The Japanese electronics giant recently showed off the world's first commercial OLED TV, with a screen just 3mm thick.
The 11-in (28-cm) energy-efficient display costs £850 and produces crisp, vivid images.
The technology is expensive and difficult, but forms a key part of Sony's attempt to recapture the television market.
In the six months to September, the firm lost 60 billion yen ($526.3 million) on its TVs.
The loss-making rear-projection televisions - which use a projector, lenses and mirrors to create images on large screens - have fallen in popularity.
In October this year, Sony lowered its sales forecast by 43% to 400,000 for the technology, popular in the US for home cinemas.
By contrast, the electronics firm expects to sell 10 million LCD televisions in the year to March 2008.
Other firms have already pulled out of the rear-projection TV market. Earlier this year, Hitachi withdrew its rear-projection TVs from the North American market, while Seiko Epson has also halted production.
Most electronics makers are focusing on cheaper LCD and plasma display panels to build large flat screen TVs.
However, some are pursuing Sony into the OLED market.
South Korean firm Samsung has said it has developed a 31in organic screen which it will show off at the forthcoming Consumer electronics Show in Las Vegas in early January.
It has not said when the prototype will be commercially available.