Sony Pulls The Plugs On OLED Due To Losses & Production Problems

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Bleeding cash and TV market share, Sony has now said that they will not deliver a new OLED TV this year because of costs and production problems. New research has also revealed that 4 out of 10 Sony OLED TV panels made are dumped because of production problems.

Hailed 18 months ago as the breakthrough TV technology that would catapult Sony into a dominant position in the TV display market, OLED TV is now turning into a lemon for the Japanese TV maker who in Australia has seen their TV display market share savaged by Samsung.

Also in Australia, Sony is struggling with several other products with the company recently admitting that they have had to replace faulty Sony Walkman and Vaio Notebooks that are prone to melting.

In an admission to the Wall Street Journal, Sony has said that they are set to delay the launch of its next organic light emitting diode, or OLED, television because mass producing the new ultrathin displays would exacerbate losses at its TV division.

In Australia, the company is trying to sell a tiny 11″ OLED TV for $6,999 which is $2,000 more than some vendors are selling a 55″ Full HD TV for, complete with a free Nintendo Wii gaming console.

Sony, who have admitted that they have never made a profit selling their Bravia LCD TV’s are on track to lose money for the sixth straight year in their TV division.

Both LG and Samsung are now set to have large screen OLED TV’s on sale before Sony. LG is planning a 15″ OLED TV monitor by Christmas. say insiders. Samsung has already shown a full working 31″ OLED TV at the 2009 CES show.

In previous ChannelNews stories we reported that Sony Chief Executive Howard Stringer had said in May 2008 that Sony would have a 27-inch OLED television available within 12 months.

 

 

Today Sony is awash in losses and Stringer is struggling to deliver profitability as his competitors take advantage of his problems.

In the latest results, Sony’s TV division lost $1.6 billion last year. While in Australia, Sony has seen their TV share fall from over 30% in 2008 to less than 14% in 2009.  Samsung now has over 40%.

According to the Wall Street Journal, research firm DisplaySearch estimates Sony’s production yield for its 11-inch OLED panel is below 60%, meaning at least four of every 10 panels its factories produce aren’t up to par and can’t be sold. Larger panels would likely introduce more difficulties. Sony declined to comment on its production yields.

Desperate to turn the company around, Stringer has restructured management with the appointment of Ryoji Chubachi, a former engineer who helped develop Sony’s eight-millimetre video camera to head the problematic consumer electronics division.

18 months ago, Chubachi was a vocal supporter for OLED and declared in 2007 that the XEL-1 was a “symbol of Sony’s comeback.”

The Wall Street Journal claims that the biggest threat to OLED’s future could be LCDs. Prices are falling rapidly even as LCD quality improves. Newer LCD models are thinner, use less energy and can offer brighter colours.

“It’s always going to be a race for a new display technology to reach an acceptable price point before LCD or plasma reaches the new technology’s performance levels,” said DisplaySearch analyst Paul Gagnon.

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