| Sony, Panasonic team up for OLED TVs |
TOKYO Rival Japanese television makers Sony and Panasonic said Monday they will cooperate to make OLED (organic light emitting diode) sets as they battle Korean rivals Samsung Electronics and LG Electronics for pole position in the next-generation TV market.
The race to garner a lead in OLED, widely touted as the successor to liquid-crystal displays, will depend on which company is able to mass produce screens at a price that will attract consumers to the new technology. Sony and Panasonic said in a statement they will develop technologies to fabricate the screens and aim to establish a mass-production process in 2013.
Both Samsung and LG Electronics have displayed 55-inch OLED prototypes, with the sets expected to go on sale this year at a rumored price tag of as much as $10,000, or about four times the cost of an equivalent LCD model.
An executive at LG Display, a flat-screen maker 38 per cent owned by LG Electronics, said earlier an internal study indicated consumers would start buying OLED TVs once the price falls to 1.3 to 1.4 times that of an LCD set.
Shipments of OLED TVs may reach 2.1 million sets in 2015 from just 34,000 this year, according to research firm IHS Inc.
Hammered by their Korean competitors in LCD TVs, Sony and Panasonic stand a better chance of competing in the next generation market by combining their OLED technologies and development budgets. Losses on TVs at Sony have mounted to around $12 billion in the past decade.
Sony pioneered OLED technology, which boast sharper images and do not need backlighting, selling the world’s first OLED TV in 2007. It halted production of the $2,000 screens three years later amid the post-Lehman global downturn. Sony still makes OLED screens costing as much as $26,000 for high-end customers.
Panasonic plans to invest about 30 billion yen ($373 million) in its Himeji plant in western Japan for a test production line of OLED panels, an industry source told Reuters last month.
The move comes as South Korean rivals Samsung Electronics and LG Electronics reportedly plan to separately release 55-inch (140 centimetre) televisions with the advanced OLED technology this year.
But Mitsushige Akino, analyst at Ichiyoshi Investment Management in Tokyo, cast doubt on the Sony-Panasonic deal, saying it is too late. “They should have done such a deal five or six years ago,” he said.
“The two companies need more drastic measures such as a withdrawal from the TV business altogether. This won’t change their severe business circumstances.”
Struggling Japanese electronics giants Sony and Panasonic said Monday they would team up to develop televisions with advanced technology, in a bid to claw back market share from overseas rivals.
In a research note, Fitch Ratings analyst Alvin Lim said similar tie-ups may be in the offing for Japan’s electronics giants, but he added that South Korean firms were “way ahead” in developing OLED technology.
“Such tie-ups between fierce competitors in the TV segment were once unthinkable, (but) they are now necessary to claw back the technological and market leadership ceded to Korean manufacturers,” said Lim, associate director in Fitch’s telecommunications, media and technology team.
The technology lets producers make TVs that consume less power while offering a sharper picture than conventional flat panels, and is expected to be one of the dominant technologies in next-generation televisions.
But he added that “Japanese OLED investment is better late than never”.
larger screens equipped with the technology.
“While consumer demand for OLED is still unproven, without investment Japanese manufacturers could become stranded in the TV market should this technology become mainstream.”
The partnership marks the first time the two firms have teamed up in a core business, a major turning point for Japan’s hard-hit electronics industry.
Sony and Panasonic lost more than $15 billion combined in the year to March owing to falling sales and intensifying competition.
“Each company plans to utilise its own strengths to develop and commercialise its own competitive, high-performance, next-generation OLED televisions and large-sized displays,” the firms said in a joint statement.
The losses have been particularly acute in the television business, where Japanese firms have been hurt by a strong yen, shrinking profit margins and stiff competition from foreign rivals.
The move comes as South Korean rivals Samsung Electronics and LG Electronics reportedly plan to separately release 55-inch (140 centimetre) televisions with the advanced OLED technology this year.
Earlier this month Sony shares tumbled below 1,000 yen for the first time since 1980 and the era of the Walkman, sending the value of the company crashing to less than a tenth of what it was just over a decade ago.
But Mitsushige Akino, analyst at Ichiyoshi Investment Management in Tokyo, cast doubt on the Sony-Panasonic deal, saying it is too late.
In April, Sony said it would cut about 10,000 jobs and spend nearly $1.0 billion on an overhaul that its new chief Kazuo Hirai described as “urgent”.
“They should have done such a deal five or six years ago,” he said.
Sony has vowed a return to the black after losing 456.66 billion yen ($5.7 billion) in the year to March, forecasting a net profit of 30 billion yen in the current fiscal year through March 2013.
“The two companies need more drastic measures such as a withdrawal from the TV business altogether. This won’t change their severe business circumstances.”
Panasonic also projected it would return to profitability in the current fiscal year with net earnings of 50 billion yen, after posting a record 772.2 billion yen shortfall in its latest financial year. Shares in Sony and Panasonic fell in Tokyo on Monday.
Agencies
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