New OLED TVs which are set to be launched in Australia later this year will cost close to $10,000 executives at LG and Samsung have admitted.LG is set to be the first of the major manufactuers to launch a 55″ OLED TV with the new model set to go on sale in Europe this month. Three years ago it was Japanese Company Sony who was bragging that they will be the first to launch OLED TV to the masses. The now dumped former CEO Sir Howard Stringer told a CES audience in 2009 that Sony “will dominate” in the OLED TV market from small OLED monitors to large display screens he said.
Now Sony is shopping around Taiwanese manufacturers in an effort to find a supplier to take on Samsung and LG in the high ened OLED display market. Sony was first to market OLED TV technology in 2007, but halted production of their $2,000 OLED 19″ monitors three years later claiming that they intended to focus on 3D. Now the Company is struggling to market 3D as both Samsung and LG strip TV market share away.
|We will win the OLED Battle claimed Sony in 2009|
The failure of Sony in the TV market highlights the fierce competition reshaping Asia’s flat panel industry. This is not the first time that Sony has lost technology battles. In the 1980s Sony lost the Beta Vs VHS battle.
“[In the past] if you wanted a top quality TV you had to buy a Sharp, Panasonic or Sony. Those days are gone,” said Steve Durose, Senior Director and Head of Asia-Pacific at FitchRatings.
The Japanese, who ruled the global TV market in the 1980s and 1990s, have been battered by their aggressive South Korean rivals, weak demand for the TVs they make and a stronger yen that erodes the value of the their exports. Sony, Panasonic and Sharp expect to have lost a combined $21 billion in the business year just ended.
Later today, LG Electronics is expected to report a quarterly profit of $267 million despite LG Display, a flat-screen maker in which the LG Corporation has a 38% stake, posted a $156 million operating loss for January-March.
The launch of OLED comes as consumers are set to be given new TV choices – between credit-card-thin OLEDs or ultra-high definition sets – that may consign today’s LCDs to the bargain shelf claims Business Standard.
Whoever can mass produce affordable OLEDs will have a headstart say analysts.
In January, Samsung and LG displayed prototype 55-inch OLED screens at the Consumer Electronics Show in Las Vegas, their new model is expected in Australia in September.
Business Standard said that for makers of OLED displays, which boast sharper images and do not need backlighting, the obstacle to consumer acceptance is price.
An executive at LG Display said recently that consumers would start buying OLED TVs once the price falls to 1.3 to 1.4 times that of an LCD set.
Japan, meanwhile, has a potential rival offering – ultra high-definition sets, dubbed 4K – that boast pictures four times sharper than today’s HDTV sets. Sony, Panasonic and Sharp all have this technology, but face a broadcasting infrastructure hurdle, as television stations would need to record in 4K for viewers to watch the new ultra high-definition standard.
“However, if the sets are used to view video downloaded from the Internet then higher definition could be viewed more easily,” said Kazuhira Miura, an industry analyst at SMBC Nikko Securities in Tokyo, potentially giving Japan an edge in any trend for connected smart TVs.
Given that, it’s too early to write off the Japanese, but they may need help to get their operations back on track.
One option being explored is an alliance of Japan’s major TV makers, brokered by the government, which would allow them to pool their R&D cash, engineering know-how and eliminate overlapping costs. Japan has already taken a step down this road, with Sony, Toshiba, and Hitachi Ltd combining their small LCD operations into Japan Display, a state-sponsored company two-thirds owned by the taxpayer.
“Creating a united maker is going to be hard,” said Yoshiharu Izumi, analyst at JP Morgan in Tokyo, citing different corporate cultures and traditions and entrenched feelings of rivalry after decades of competition. “An alliance just to cut costs doesn’t really make sense. Of course any tie up doesn’t have to be between Japanese companies, it could be Taiwanese.”
James Jeong, chief financial officer at LG Display, told Reuters: “We’re talking to TV manufacturers, including Japanese, for cooperation (in OLED supplies). There’ll be plenty of opportunities for cooperation and tie-ups in the display industry … as long as it’s not your sworn enemy.”
A senior LG Electronics executive, who also didn’t want to be named, noted problems in Japan in product innovation, supply chain management and slow management decision-making, as well as a focus on the domestic market over exports.
“It’s like a swimming contest,” the executive said. “Once there’s a gap, it’s really difficult for the follower to narrow the gap dramatically as the one ahead continues to move ahead.”