SED TV To Be Sold In OZ By Toshiba
By David Richards and Digi Times | Sunday | 28/01/2007
Toshiba Australia will sell SED TV's according to local Managing Director Mark Whittard. This is despite the bust up of the SED production joint venture with Canon.
Toshiba announced early in January 2007 that it was pulling out of the SED joint venture (JV) it formed with Canon in 2004. However, it does not look like the Japanese companies are backing down from the fight, as Canon and Toshiba stated that the decision was reached based on the assumption of prolonged litigation pending against Canon in the US.
Although SED will become a wholly owned subsidiary of Canon starting from January 29, 2007, it does not mean Toshiba is out of the picture. "We will defiantly be selling SED TV's in Australia under the Toshiba brand name. We are not certain when this will happen". Said Whittard. Overseas Toshiba employees say that screens could be in Australian stores by late 2007.
According to the Digi Times, as the flat screen TV market grows those involved in bringing SED (Surface-conduction Electron-emitter Display) TV technology to market will do most of their battling in the courtroom, with the legal wrangling between the SED TV developers (Toshiba and Canon) and the SED IP holder (Nano-Proprietary) set on a collision course with a jury trial.
For those keeping score in the SED legal saga, Nano-Proprietary (NNPP) appears to have won the latest round. The two companies Toshiba and Canon have agreed that they will carry out the SED panel business independently in order to facilitate the earliest possible launch of a commercial SED television business. According to Canon, production of SED panels will still begin in July and the completed panels will be sold by SED to Canon and Toshiba, meaning that Toshiba will still market SED TVs.
Currently Canon does not have production facilities to make the SED TVs andat the recent CES Show in Las Vegas the company indicated that it will initially outsource its own assembly to Toshiba. Toshiba was not available to comment on the production schedule, but Atsutoshi Nishida, president of Toshiba was quoted in a December Nikkei Business report as saying the company's SED production facility in Himeji, Japan was on schedule. In addition, in October 2006, CNET reported that SED had made some manufacturing breakthroughs that would make SED TVs competitive in the market with LCD TVs.
Nishida indicated that Toshiba does not plan on competing with LCD and PDP TVs in the market, as he considers the rival technologies as commodity applications, according to Nikkei Business. Toshiba will instead, at first, focus on niche professional market segments, such as the broadcasting industry, and its SED TVs will be limited and pricey, the paper stated.
Canon also noted that mass production will not start any time soon, and there will be only a limited number of SED TVs in the market this year.
Unlike Toshiba, Canon plans on targeting the consumer TV market. According to Richard Berger of Canon, the company envisions SED TVs as being the information window for the home, and in line with such a view, Canon aims to expand into the home market.
On one hand, it appears that Canon and Toshiba have dodged a legal bullet with their latest manoeuvre and Canon now can proceed with its plans to bring SED TVs to market. In line with such plans, Canon has just completed a new facility at its Hiratsuka Development Centre, where SED Inc. is located, with the role of the new facility being to develop mass-production and device-development processes.
This is the second SED facility in Hiratsuka, with the original development facility focused on the production and prototype development line of 55-inch SED panels and the development of elemental technology.
However, even without its legal issues, Canon still faces an uphill battle with its SED project. Just before Toshiba pulled out of the joint venture, Reuters reported that Canon and Toshiba may delay or even drop their plans to build a US$1.7 billion plant to volume produce the TVs. Merrill Lynch published a report saying it believes there are reasons other than patents worries that are responsible for the delay. The financial firm pointed out that it would be difficult to make SED profitable in the competitive flat-panel industry. And without Toshiba as its partner, Canon will now be footing a larger portion of the bill needed to set up a SED production infrastructure.
Then there is the NNPP lawsuit, which is slowly winding its way through the US legal system, and the most recent court rulings in the case have not been very encouraging for the Japanese company.
In 2005, NNPP filed suit against Canon, claiming that Canon was violating a non-exclusive 1999 patent license agreement that the two companies signed. NNPP had two major complaints against Canon and its SED subsidiary, with the first being that SED and Canon did not actually have the right to produce the colour panels, as television panels constituted excluded products under the 1999 license. This assertion did not hold up, and NNPP amended the complaint in 2006 to drop the count related to the definition of excluded products.
However, NNPP had more success with its second assertion, that the SED joint venture was not actually a subsidiary of Canon, and therefore violated the original licensing deal. Under the terms of the 1999 licensing agreement, Canon was allowed to share the technology with its subsidiaries, but not with other companies.
Canon thought that because it owned one more share than Toshiba did in the SED joint venture - giving it 50.002% of the company - which it followed that SED was a Canon subsidiary, and the company tried to have the complaint dismissed. However, a Texas judge saw things differently and denied the motion.
In the November 2006 decision, United Stated district judge Sam Sparks pointed out that although Canon had one more voting share in SED than Toshiba did, it had agreed not to use its share advantage to outvote Toshiba on matters governed by the joint venture. Judge Sparks argued that Canon had bargained away its voting rights, and in true Texas style, the judge wrote, "Dead fish don't swim, dead dogs don't hunt and Canon's dead voting rights don't give it a majority of SED."
The decision came at a bad time for Canon, as the company was preparing to demonstrate 55-inch SED TVs at the recently concluded CES 2007 in Las Vegas. The company had to forego exhibiting the panels but - perhaps because the market had become accustomed to schedule delays for a product that was originally scheduled to be launched in 2005 - Canon tried to make it very clear that the latest hiccup was not due to any technical or business issue.
Still, a hiccup it was, and many market watchers worry that SED has missed its market window. A trial date for the case has been set for March 2007, but the case could wind through the court for a prolonged period. According to market sources, Canon and NNPP have discussed a possible settlement, which would probably include a royalty for NNPP for each SED TV shipped, but no agreement has been reached.
NNPP, for its part, appears to be ready to settle. The company did not seem too concerned over the recent decision by Toshiba to exit from the SED joint venture. NNPP, instead said it was pleased Canon and Toshiba have decided to continue to move forward with their SED TV, and it was willing to enter into a new license agreement with Canon on reasonable terms. Under the original agreement, NNPP only negotiated for a one-time payment from Canon of US$5.6 million for licensing the technology and the company would have received no royalty payments for any SED TVs shipped.
However, if in fact Canon is having issues moving to mass production that don't involve the patent case, then the company may not feel too much pressure to settle the case quickly, and a date in court for the two companies is a definite possibility.
The lawsuit was filed in the US, and although NNPP stated it has patent licenses in other countries, Canon confirmed that it will be able to launch SED TVs in Japan this year. So, it may be possible that SED becomes a high-end low-volume niche product in Japan.
NNPP and Canon both declined to comment on the case, but Canon seems firmly focused on one thing now - getting the product to market. Prices for the 55-inch TV have not yet been set and the company cannot provide any concrete shipment numbers for the initial run or confirm any mass production schedule, but Canon is still very determined to ship SED TVs this year, and the company said it is still on schedule.
Despite so many unknowns concerning the fate of SED, HDTV enthusiasts remain enamoured with the technology and its promise of combing the slim footprint of other flat panel TVs with the picture quality of traditional CRT TVs.
Like traditional CRT TVs, SED technology is based on the targeted emission of electrons. When they hit the screen, these electrons cause a phosphor-based fluorescent layer in the glass surface to light up. Canon has been touting SED TVs as delivering response times of under a millisecond and permitting production of large-size (over 40-inch) displays of only a few centimetres thick, with a brightness andcolour quality comparable to standard CRTs but with power consumption up to half that of a PDP or two-thirds that of an LCD of comparable size.
However, as the market waits on SED, other next-generation technologies are being developed in the meantime. One such TV technology being touted is carbon nanotube televisions (CNT TV), which also promises to deliver a better quality picture than PDP and LCD and at a lower cost.
In March 2006, Nano-Proprietary entered into an agreement with little known Taiwan-based company Da Ling to enter into negotiations to form a joint venture dedicated to constructing CNT TVs. Unfortunately, two days later the person who had leased the CNT technology to NNPP attempted to terminate the license.
And NNPP's response? It filed a lawsuit.
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