Posts Tagged ‘LG’
Who ARE Those Guys?
- Published on Monday, 30 September 2013 10:34
- Pete Putman
- 0 Comments
A recent article on the Reuters Web site details how Chinese LCD TV manufacturers are quickly gaining ground on Korean TV heavyweights LG and Samsung – and they’ve used UHDTV, a barely-hatched technology, to do it.
According to the Reuters story, LG and Samsung were so focused on one-upping each other in the still-gestating OLED TV business that mainland brands like BOE Technology and TCL and Taiwan-based Innolux and AU Optronics managed to sneak into the party and capture significant sales of 4K UHDTV sets using conventional LCD technology.
Until last year, a paltry 33,000 UHDTV sets had been sold worldwide (200M 2K and 720p LCD TVs were sold during the same time period). But shipments of 4K TVs have since multiplied by 20 times, based on data from IHS. And the Chinese are a big reason why.
In a rare moment of candor, LG Display’s CEO Han Sang-beom was quoted as saying, “…I have to admit that we hadn’t fully appreciated the potential of the UHD market. We assumed it’ll be too early for this type of display to take off, and thus didn’t think much of having diverse UHD product line-ups, especially in the low end. But I think we are not late just yet and we are working hard to lead the market here.”
In Q2 ‘13, BOE Technology reported an 8.9 percent operating profit margin, while China Star Optoelectronics Technology (CSOT), a unit of TCL Corp, achieved a 9.6 percent margin. LG Display, the world’s No.1 LCD maker, posted a 5.6 percent margin, while Samsung Display, a unit of Samsung Electronics, had a whopping margin of 13 percent. But take out the OLED business and Samsung’s LCD margin drops to somewhere between 3 and 7 percent.
To show you just how severely the winds have changed against Japanese TV manufacturers, Sharp Corporation – the company that basically invented the LCD TV – reported a 0.5 percent profit margin for Q2 ’13, after several quarters of red ink.
Can the Chinese do to Korea what the Koreans did to the Japanese? It’s entirely possible: During the same Q1 ’13, global TV shipments grew by 4% Y-Y, according to NPD DisplaySearch. But all of that growth was in mainland China, where TV shipments ramped up an astonishing 28% Y-Y. Take out those numbers from the overall worldwide shipments total, and LCD TV shipments actually declined almost 4% Y-Y.
In recent weeks, we’ve seen a flurry of 4K and UHDTV announcements from Panasonic, Sony, and now Sharp. The latter, which unveiled a 70-inch 4K set (LC-70UD1U) at CE Week back in June, is now shipping it and the SRP (so far) is $7,500. Keep in mind that Sony brought out its LGD-manufactured 84-inch 4K LCD TV for $25K a year ago; LG dropped that price by $5K not to long after, and JVC’s 4K monitor version (also using the same LGD panel) is available for $15K.
Samsung and Sony both have 4K LCD TVs in the 55″ – 65″ range that are retailing for about $90 – $100 per diagonal inch. That’s quite a drop from the nearly $300/diagonal inch that Sony started out with in 2012!
There’s no question that everyone is jumping the gun on pricing, and it’s most likely due to worries about the new crop of UHDTVs from from what is becoming the world’s fastest-growing market for consumer electronics devices.
It took over a decade for 2K HDTV to really get established in the market. Then, prices collapsed, and with them, operating margins. Will 4K follow that same timetable, or will it make even faster inroads?
Fans of the 1969 movie Butch Cassidy and the Sundance Kid will recall how those two fled the U.S. for supposedly safer quarters in South America. And yet, their pursuers stayed doggedly on their trail, following them all the way to Bolivia. “Who ARE those guys?” asked Robert Redford, over and over as they were flushed from yet another supposedly-secure hiding place.
Now, Samsung, LG, and Japan Inc. may very well be asking the same thing…
Guess What, LG? Samsung’s Got a 55-inch Curved OLED TV, Too.
- Published on Wednesday, 14 August 2013 11:56
- Pete Putman
- 0 Comments
Yesterday at the cavernous Cipriani’s Restaurant in New York City, Samsung let us in on what had to be the worst-kept secret of 2013: They’re bringing a 55-inch curved OLED TV to market.
By “worst-kept,” I don’t mean to imply that any Samsung employees or PR agency personnel broke any embargo rules. No, they did a fine job keeping mum until the noontime press conference.
But Samsung had previously shown this product at CES. And so had LG (three of ‘em, to be exact). When LG announced earlier this month that they had begun shipments of their $15K 55-inch curved OLED, you just knew that Samsung would answer in short order with not just one, but multiple volleys.
And answer they did! The KN55S9C is Samsung’s official entry into the OLED television market. Like the LG product, it has a slight curved screen. Unlike LG’s version, it uses RGB OLED emitters (LG employs a white OLED emitter design with color filters). And unlike the LG product, Samsung’s OLED TV will sell for less than $10,000.
In fact, the SRP for the KN559SC is $8,999.99 (OK, let’s round it up to $9,000), which should result in a price drop from the folks in Englewood Cliffs pretty quickly. Analysts have wondered just where the market for OLED TVs would start, and $10K is quite a bit below where I targeted.
One reason may be that Samsung is getting better-than-expected yields on their large OLED panels. (The company confirmed that, but would not be specific about actual yields.) I’ve heard that LG Display’s yields range anywhere from 10% to 30%, but would think the lower number is more realistic. So Samsung may be seeing yields in the range of 20% or so.
The pixel structure in the KN559SC is intriguing. There are actually two dark blue pixels for every single red and green pixel. (See photo.) And Samsung claims to have some sort of brightness compensation circuit to offset differential aging of the dark blue pixels. Well, running two of them at half-brightness would certainly extend their half-brightness lifetime. (The blue color materials are licensed from Universal Display Corporation in Ewing, NJ.)
One cool feature that Samsung showed was MultiView. OLEDs, being emissive devices like plasma display panels, have very fast on/off cycling speeds. So switching at high frame rates like 120 and 240 Hz is a walk in the park for them.
Samsung uses this characteristic to show two different video programs simultaneously, using 3D active shutter glasses to open on either the even or odd-numbered video frames (not fields). With MultiView, one person could be watching a basketball game while the other is enjoying a soap opera. Texas Instruments also showed this trick over a decade ago at CES and CEDIA Expo, using Samsung DLP rear-projection TVs.
Almost overlooked at the event were Samsung’s UHD TVs. In addition to 55-inch and 65-inch models, the new 85-incher took a bow (I saw it previously at NAB and CES). These sets have spectacular image quality, but you’ll pay about $1K per diagonal inch for the smaller sets and a cool $40K for the 85-inch version. Look for major adjustments on those prices as the Chinese TV manufacturers start pushing more 4K product into the US market.
All of these TVs come with Samsung’s Smart TV Smart Hub feature, and each is future-proofed with the Evolution Kit interface for OS and other updates. One trend we’re starting to see is exterior frames with suspended TV screens inside them, as the 85-inch and 110-inch LCD sets from CES were shown. Now, the KN559SC borrows from this styling with a glossy black frame surrounding the TV, giving the impression that it floats. Pretty cool.
Will we see comparable products from Sony and Panasonic? Both companies have shown 56-inch 4K OLED TVs, but these products aren’t anywhere near ready for prime time. And Sony’s introduction of quantum dot backlights on their Triluminous LCD TVs took color reproduction to a new level, probably extending the dominance of LCD technology for a few more years.
Keep your eye on both the LG and Samsung TV products to see if (a) market demand is there, even at these higher prices, (b) differential aging of the blue pixels manifests as a problem or not, and (c) 4K versions of these products are announced later his year, or at the 2014 CES. That will tell you how committed both companies are to the technology…
CES 2013: From Hype to Ho-Hum in Minutes
- Published on Monday, 14 January 2013 10:20
- Pete Putman
- 0 Comments
Here we go again ! (Sigh…)
Things are booming in the world of consumer electronics, regardless of the state of the world’s economy. You needed no additional proof beyond the enormous turnout at last week’s International CES, which was in excess of 150,000, according to official press releases. Even if you apply the Kell factor, that’s still a huge turnout – at least 120,000.
I’ve used an easy rule to determine attendance: How long it takes to catch a cab at the end of the first two days of the show. 10 minutes? Light turnout. 20 minutes? Respectable turnout. 40 minutes or more? Now, that’s a crowd!
I spent the equivalent of three full days at the show, scrambling back and forth between strip hotels and the convention center, capturing over 1200 videos and photos along the way. After a while, it all started to blur together. I mean; how many 110-inch TVs do you have to see before the “awe” wears off? How many tablets will you run across before you swear never to touch another one?
This year’s edition of show was characterized by a level playing field across many technologies. No longer do the Japanese and Koreans have an exclusive right to “first to market.” Their neighbors across the sea are now just as technically competent, if not more so.
Hisense’s “Big Bertha” uses the same glass as TVs shown by TCL, Samsung, and Westinghouse Digital.
Everybody (and their brother) had an 84-inch 4K TV at the show. (Yawn…)
Case in point: The 110-inch 4K LCD TVs shown at CES (I counted four of them, including one in the Samsung booth) all use glass from a Chinese LCD fab known as China Star Optoelectronics Technology, which is a three-year old joint venture between TCL, Samsung, and the local government of Shenzen.
Never heard of them? You will. What’s even more amazing is that their Gen 8.5 LCD fab is (according to an industry insider I spoke to) more efficiently used when cutting two 98-inch LCD panels at the same time. Those are huge cuts, and given China’s predilection for market dominance, we may see rapid price drops in 4K TVs across all sizes by the end of 2013.
Speaking of 4K (UHDTV); everyone had it. And I mean everyone! Sony, Panasonic, LG, Samsung, Toshiba, Sharp, Westinghouse, Skyworth, TCL, Hisense, Haier – wait! You never heard of those last four companies? The last three had enormous booths at the show, and Hisense showed five different models of 4K TVs – 50, 58, 65, 84, and 100 inches. That’s more than anyone else had.
In a significant marketing and PR coup, TCL managed to get their 110-inch 4K TV featured in Iron Man III, which debuts in May. That’s the sort of promotional genius that Sony and Panasonic used to pull off. But there are new guys on the block now, and they’re playing for keeps. The steady decline of the Japanese TV industry and continuing financial woes of its major players are all the proof you need.
So – who was REALLY “first” to show a 4K 56-inch OLED TV? Sony, or…
…Panasonic, who also claimed they were the “first?” (Maybe it was a matter of minutes?)
Interestingly, Sony’s booth signs identified this display as the “world’s first and largest OLED TV.” Puzzling, as it clearly wasn’t the first OLED TV ever shown, and just down the hall, Panasonic was showing its 56-inch OLED TV, the “world’s largest 4K OLED created by printing technology.” Both companies need to get out of their booths more often!
Panasonic, who emphatically renewed their commitment to plasma at CES (despite a continued decline in plasma TV sales worldwide), clearly wanted to show they had a second act ready when plasma eventually bites the bullet. The company is also a major player in IPS LCD, manufacturing LCD TVs in sizes to 65 inches that are every bit as good anything LG cranks out.
Speaking of LG…the heavy emphasis on 3D found in last year’s booth was all but gone this year. Yes, the enormous passive 3DTV wall that greeted visitors at the entrance was still there. And there were a few passive 3D demos scattered throughout the booth. But the more impressive exhibit featured a wall of curved 55-inch OLED TVs. (Why would anyone need a curved TV? You’re probably asking. Well, why would anyone need most of the stuff you see at CES?)
LG also showcased a unique product – a 100” projector screen illuminated by an ultra-short-throw laser projector. LG billed it as the world’s largest wall-mount TV (for now) and it’s known as “Hecto.” The projector uses laser diodes (presumably with DLP technology; that wasn’t mentioned) to illuminate that screen at a distance of just 22 inches.
It’s bad enough that LG shows 55-inch OLED TVs we can’t buy yet. Now, they have curved OLED TVs we can’t buy yet. (Drool…)
Got two people who want to watch two different 3D TV programs at the same time? No problem for Samsung!
Back down the hall, LG’s neighbor Samsung also showed a 55-inch curved OLED TV (just one) and a couple of company representatives were surprised to hear that LG had a bevy of them. (I repeat my observation about booth personnel who need to get out more.) Samsung did have a clever demo of an OLED TV showing simultaneous 2K programming – simply change a setting on the 3D glasses and you could watch one or the other show. (TI showed this same trick years ago with DLP RPTVs by switching left eye and right information.)
Samsung did have an 85-inch 4K LCD TV that wasn’t duplicated anywhere else on the show floor, and as far as I can tell, it’s a home-grown product. But given the company’s investment in China Star and its shifting emphasis on AM OLED production, I would not be surprised to see Samsung sourcing more of its LCD glass from China in the near future.
Sharp’s booth intrigued me. Here’s a company on the verge of bankruptcy that was showing a full line of new Quattron LCD TVs, along with “Moth Eye” anti-glare first surface glass. Moth Eye glass preserves high contrast and color saturation, but minimizes reflections in a similar way to a moth’s eye; hence the name. Sharp also had impressive demos of flexible OLEDs and a gorgeous 32-inch 4K LCD monitor.
IGZO was also heralded all around the booth. Indium Gallium Zinc Oxide is a new type of semiconductor layer for switching LCD pixels that consumes less power, passes more light, and switches at faster speeds. Many LCD manufacturers (and OLED manufacturers, too) are working on IGZO, but Sharp is closer to the finish line than anyone else – and that may be the salvation of the company, along with an almost-inevitable orderly bankruptcy.
IGZO is why Terry Gou, the chairman of Hon Hai Precision Industries, wants to buy a piece of Sharp – about 10%, to be exact. He’s looking for a source of VA glass for Apple’s tablets and phones (Hon Hai owns Foxconn, who manufactures these products.) And if Sharp can’t get its financial house in order, he might wind up making a bid for the entire company. (“Never happen!” you say. “The Japanese government wouldn’t allow it.” Well, these are different times we live in, so never say “never!”)
Sharp may not be able to balance their books, but they still know how to manufacture some beautiful displays.
It goes without saying that Tony Stark would have a 110-inch TV, right?
On to the Chinese. They showed 4K, 84-inch and 110-inch LCD glass cuts, gesture recognition, clever LED illumination systems, 3D, smart TVs – basically, everything the Japanese and Koreans were showing. Hisense had a spectacular demo of a transparent 3D LCD TV, along with something called U-LED TV. The explanation of this by the booth representative was so ambiguous that I’ll leave it at an enhanced method of controlling the backlight for improved contrast.
I had heard from an industry colleague that Hisense’s XT880-series 4K TV would have rock-bottom retail prices, but couldn’t confirm this from booth personnel. (Think of $2,000 for a 50-inch 4K TV.) The company’s gesture recognition demo wasn’t nearly as impressive – it’s powered by Israel-based EyeSight – but clearly shows that Hisense is just as far along in refining this feature as anyone else.
TCL had demonstrations of high-contrast 4K TVs with amazingly deep blacks; as good as anything I’ve seen from LG and Samsung. They also had a demonstration of autostereo 3D at the back of their booth, very close to Toshiba (who was showing the same thing). Haier had that now-ubiquitous 4K LCD TV prominently featured in their booth, along with smart TVs and what must have been several dozen tablets. Meanwhile, Skyworth’s booth in the lower south hall showcased yet another 84-inch 4K TV.
RCA’s got the first tablet with an integrated ATSC/MH tuner, and it runs Windows 8.
TV antennas are passe? NOT!
Celluon’s laser-powered virtual keyboard works on any surface. TI had a pair connected to picoprojectors in their suite.
Vizio’s suite at the Wynn featured 80-inch, 70-inch, and 60-inch LCD TVs using the Sharp Gen 10 glass, and they looked impressive. One version of the 70-inch set is already selling below $2,000, and the 80-incher will come in (for now) at just under $4,500. Vizio also had three new 4K TVs in 55-inch, 65-inch, and 70-inch sizes, but no pricing was announced yet. (Everyone is sitting on their hands waiting for the other guy to price his 4K TVs!)
There was obviously a lot more to CES than televisions. Vizio has a new 11.6” tablet with 1920×1080 resolution that runs Windows 8 with a AMD Z-60 processor. Panasonic showed a prototype 20-inch 4K (3840×2560) tablet using IPS-alpha glass. It also runs Windows 8 with an Intel Corei5 CPU and has multi-touch and stylus input. And RCA had a cool 8-inch tablet (Win 8 OS) that incorporates an ATSC receiver and small antenna. It can play back both conventional 8VSB and MH broadcasts.
Silicon Image had a kit-bashed 7” Kindle tablet running their new UltraGig 6400 60 GHz transmitter, delivering 2K video to a bevy of LCD TVs. They also showed a new image scaling chip to convert 2K to 4K, along with the latest version of InstaPrevue. The latter technology lets you see what’s on any connected HDMI input with I-frame thumbnails of video and still images.
Silicon Image’s new UltraGig 6400 TX chip connects this full HD Kindle tablet to an HDTV at 60 GHz.
Conexant’s powerful speech processing chips can filter out any background noise while you “command” your smart TV.
Omek’s gesture control demo was easily the most impressive at the show.
Over in the LV Hotel, Conexant dazzled with a demonstration of adaptive background noise filtering to improve the reliability of voice control systems for televisions. The demo consisted of a nearby loudspeaker playing back an art lecture while commands for TV operation were spoken. A graphical representation showed how effectively the background noise was filtered out completely. The second demo had a Skype conversation running with a TV on in the background and the remote caller walking around the room. I never heard one peep from the TV, and the remote caller was always intelligible.
A few floors down, Omek (yet another Israel-based gesture recognition startup) had perhaps the best demo of gesture control at the show. Their system captures 22 points of reference along your hands, allowing complex gesture control using simple, intuitive finger and wrist movement. (No flailing of arms was necessary). I watched as an operator at a small computer monitor pulled a virtual book from a shelf and flipped through its pages, and also selected a record album, removed the record from its sleeve, and placed it on a virtual turntable. I was even treated to a small marionette show!
At the Renaissance, Prime Sense had numerous exhibits that all revolved around their new, ultra-compact 3D camera design. One demo by Shopperception involved boxes of cereal on a shelf. As you picked one up, the sensors would flash a coupon offer for that cereal to your tablet or phone, or suggest you buy a larger, more economical size instead of two boxes.
Nearby, Covii had one of those “You Are Here” shopping mall locator maps that operated with touchless sensing to expand and provide more detail about any store you were interested in, including sales and promotions. And Matterport had a nifty 3D 360-degree camera that could scan and provide a 3D representation of any room in about one minute. You could then rotate and turn the views in any direction.
Do not – repeat, DO NOT try this at home with your tablet!
A hybrid low rider? With a 500-watt sound system? Who’d a thunk it?
Wear this Garmin GPS watch and nobody can ever tell you to “get lost!”
HzO was back with another amazing demo of their WaterBlock waterproofing system. They had a tablet computer sitting in a continuous shower, and also dunked it in a fish tank. Additional demos included dropping smart phones in a bowl of beer and other mysterious liquids. The water infiltrates all spaces but has no effect on operation – you just drip-dry the device once extracted from water. (How do you get rid of the beer smell, though?)
There was an HDMI pavilion at the show, but I was more interested in the goings-on at the DisplayPort exhibit. VESA representatives showed me a single-channel DP connection from a smart phone to a TV for gaming and playing back video, all over a super-thin connecting cable. The powers that be at VESA are also talking about upping the data rates for DisplayPort (currently about 18 Gb/s) to accommodate higher-resolution TVs.
Right now, DP uses an uncompressed data coding method. But there is now discussion of applying a light compression algorithm (tentatively called DisplayStream) that would enable data rates to go much higher – more like 25 Gb/s. (DisplayPort can currently handle 3840×2160 pixels with 10-bit color and a 60-Hz refresh rate.)
I was surprised at the number of devices at the show that support HDMI, and expected more support for DP given its ability to handle higher data rates and its Thunderbolt data layer overlay. It may still be early in the game – the venerable VGA connector is on its way out starting this year, and manufacturers of laptops, tablets, and phones are still debating which digital interface to hitch their horses to.
No, this is not a typical CES attendee. But it’s how all of us feel after three days at the show.
Panasonic’s 20-inch 4K offering is the Rolls-Royce of tablets. (So who needs a notebook!)
Suffice it to say that this was a VERY popular booth at CES…
…as was this one. Sealy lets you control your mattress settings from your iPad. (Hey, it’s CES!)
Let’s wrap things up with a discussion of ultrabooks. Intel’s booth prominently featured a full line of these next-gen notebooks, although several of the models on display weren’t nearly as thin as I’d expect an ultrabook to be. Shipments of “ultras” in 2012 were only about half of what was forecast.
The reason? Tablets. Vizio’s new tablet is one of the larger models at nearly 12 inches, but Panasonic showed you can go even larger and make it work. At that point, why would you need a notebook? I left mine at home this time and used a Nook HD+ instead. Fitted with a Bluetooth keyboard and mouse, and loaded with Office-compatible programs, it did everything I needed it to do while in Vegas.
Needless to say, the Intel booth representative wasn’t too happy when I pointed this out to him. But that’s the thing about CES: There’s always some other guy at the show that has the same or better product than you. There’s always a better mousetrap or waffle-maker lurking in the South Hall. Very few companies have much of an edge in technology these days (the Chinese brands proved that in spades), and so many of these “wow, gotta have it!” items become commodities in rapid order.
The plethora of 4K and ultra-large LCD TVs found at CES proved this conclusively, as they went from hype to ho-hum in a matter of minutes. So did tablets, smart phones, and other connectivity gadgets. What CES 2013 was really about was the shift in manufacturing prowess and power to China from Japan and Korea; a shift that will only accelerate with time. And that is definitely NOT ho-hum!
Editor’s note: Many thanks and a tip of the hat to Nikon booth personnel, who were apparently charging and swapping out batteries for journalists who (like me) inadvertently ran out of power during the show. They saved me more than once!
Marilyn says, “Gentlemen prefer 4K 3D curved wireless multi-touch OLED IGZO cloud-based voice controlled tablets!” (See you next year…)
Red Ink at Morning; Investors Take Warning! – Pete Putman
- Published on Thursday, 08 November 2012 13:11
- Pete Putman
- 0 Comments
November 1 was the quarterly earnings reporting day for Sharp, Panasonic, and Sony. And the news wasn‘t very good.
On Thursday, Sharp warned investors that it could lose $5.6B for the current fiscal year, and watched helplessly as its stock price plummeted to 25% of its value since the start of the year. According to a Reuters story, Sharp’s commercial credit rating fell by six notches, making it all the more difficult for Sharp to borrow additional funds to stay afloat.
Sharp’s incredible plunge in share price and net valuation adds considerable pressure to close a proposed deal with Hon Hai Precision, wherein the latter company would become Sharp’s largest institutional shareholder. But there have also been rumors that Sharp is trying to negotiate financial support from Intel and Apple, who uses Sharp panels in its iPad and iPhone products.
Things aren’t much better down the street at Panasonic, where the company ambushed analysts by forecasting a $9.6B loss for fiscal 2012. That number is about 30 times what the market expected, and Panasonic paid the price as its shares dropped by 20%, hitting a low in valuation not seen in 30 years.
Analysts have called for Panasonic to shed more personnel, but so far, the company plans to stand pat. According to Reuters, the company is likely to change direction and move away from money-losing television and other consumer electronics business units. The company’s stock price has dropped by more than 35 percent as it continues to restructure after closing the acquisition of Sanyo.
Panasonic’s earnings announcement was a surprise as the company had eked out a modest profit in the 2nd quarter of this year. But once again, the culprit appears to be televisions, an area where Panasonic has lost money for four consecutive years.
Sony, the poster boy for mismanaging a flat panel television business strategy, fared slightly better than its competitors. The company managed to squeeze out a $379M operating profit for the 2nd quarter, compared to a $20M loss a year ago during the same time period. But analysts attributed a good portion of that profit to the sale of a chemicals business, according to yet another Reuters story.
Even so, Sony is sticking to its original forecast of a $1.63B profit for fiscal 2012, which ends in March of 2013. But analysts still expect the company to lose money for the ninth consecutive year in its television operations, and Sony did announce it expects to sell fewer televisions this year (14.5M) than in 2011.
How much longer can this go on? The answer (at least in Sharp’s case) is until 2014, thanks to an additional $4.5B in bank loans obtained from Bank of Tokyo-Mitsubishi UFJ and Mizuho Corporate Bank. (Betcha the Japanese government was involved in that decision!)
How all of these companies got into this mess is a long story, but the main culprit is the near-commoditization of the television business. Worldwide television shipments are dominated by Samsung and LG, who control nearly 45% of the market between them.
In comparison; Sony, Sharp, and Panasonic together account for about 20% of worldwide TV shipments. It wasn’t that many years ago that Sharp had 21% of the LCD business to itself. Now, it struggles to maintain a 5% market share, and Sony is barely attaining 9%.
The decline of the Japanese TV industry has been well-documented by this and other publications. The trend is so clear and irreversible that we analysts often wonder just how far these companies will go to deny the truth and continue struggling to right what is obviously a sunken (not sinking) ship.
The fact is; all three companies have other business units that have plenty of upside. Assuming Sony comes to its senses and gives up on television manufacturing, it can do well in cameras, computers, and imaging – and may even see some gains from its PlayStation operations. Sony is doubling its efforts in cell phones and tablets, too.
Panasonic, thanks to its acquisition of Sanyo, is well-positioned to be a leader in both solar energy and battery technology, even though worldwide demand for solar cells is weak right now. The company has expanded its IPS-alpha LCD manufacturing capacity at its Gen 8 Himeji plant, showing 20-inch, 32-inch, and even 47-inch 4K panels. And it appears Panasonic is pushing ahead with OLED R&D, anticipating the eventual sunset of plasma technology.
That leaves Sharp, whose decision to build the Gen 10 Sakai LCD fab may or may not have been a smart idea in retrospect. But what’s done is done, and now Sharp has to find a way to push plant utilization back to full capacity.
Given that Sharp appears to be closer to implementing IGZO (oxide) backplane technology than anyone else, and that Hon Hai is in the driver’s seat with Apple for now, the storm clouds over Osaka should be parting in the next year if the Hon Hai deal closes and if Sharp does the sensible thing and exits the TV business in an orderly fashion.
Otherwise, we may witness an enormous corporate bankruptcy, created by financial winds so strong that no one on earth can possible control them…
The Rout Is On – by Pete Putman
- Published on Friday, 16 March 2012 12:52
- Pete Putman
- 0 Comments
As things go, the flat screen TV business is relatively young. Until ten years ago, large LCD TVs weren’t even viable products. And plasma dominated the large screen (42” and up) flat screen TV business.
But neither technology held any substantial market share. Instead, CRT televisions (and rear-projection CRT sets) were ‘kings of the hill.’
Going back through some of my archives, I found that in the fourth quarter of 2005, CRT TVs held a 78.9% worldwide market share. That represented a decline of 15% from Q4 of 2004, no doubt due to the 137% increase in LCD TV market share in the same time period (yes, you read that right, 137%!).
While LCD TVs held a 14.7% market share, plasma TV share grew from 1.8% of all TVs sold to 3.9%, a growth rate of 109%. CRT rear-projection TVs held .9% of the market, a drop of 60% from Q4 ’04, while microdisplay RPTVs grew to 1.6% of the pie, an increase of 52% over the same time period. (All numbers compiled from DisplaySearch reports.)
How about the major TV brands? From Q3 ’05 to Q4 ’05, it might surprise you to learn that Sony had the top TV brand revenue share and growth, with 14% of all TV sales revenue (a quarterly growth rate of 130%)! Samsung was right behind with 11% revenue share and 36% Q-Q growth, followed by Philips (9.1% revenue share, 31% Q-Q growth), Panasonic (8.3% revenue share, 13% Q-Q growth), and LG (7.8% revenue share, 28% Q-Q growth).
These five companies accounted for 50% of all TV revenue in Q4 of 2005. And there was only about a 6-point spread between #1 and #5, so the pie was being divvied up pretty equally.
In terms of TV brand unit share, the order was changed somewhat. LG captured the number one spot with 9.8% unit share in Q4 ‘05, followed by Samsung (9.2%), TTE (7.5%), Philips (7.1%), and Sony (6.9%). The remaining 60% was chopped up among a host of brands.
The eye-opener here was when I went back to the beginning of 2005. For the first quarter of the year, Sharp topped the branded TV market share with an amazing 21% (a year-to-year growth of 82%). Philips was number 2 with 14.7% share, followed by Samsung (10.8%), Sony (10%), and LG (7.3%). The five brands accounted for 60% of all TV sales back then.
So – in a little less than a year, Sony added 7% to its brand share, while Samsung marched in place, LG picked up about 2 points, Sharp fell off the map completely, and Philips lost half its brand share. (TTE didn’t show up in the 2005 listings at all.)
Now, let’s jump ahead to Q4 2011. NPD DisplaySearch’s latest numbers show that LCD flatscreen TVs now account for 86.5% of all TVs sold worldwide. Plasma continues to decline as it pushes into a larger screen ‘niche,’ grabbing a miniscule 6.9% market share. Amazingly, CRT TVs still held a 6.4% share, while RPTVs managed to eke out a .0004% market share – look for this category to be killed off completely in 2012.
And the tables have turned completely from 2005 in terms of worldwide market share. Samsung managed the amazing feat of increasing its market share to 26.3% from Q4 ’10 to Q4 ’11, an all-time record and an amazing growth rate of 18% in an otherwise-flat (no pun intended) industry. LG was far behind Samsung with a 13.4% market share, essentially unchanged since Q4 ’10.
As for Sony, they also held steady at 9.8%, basically the same as a year before, while Panasonic saw a decline of 2% to 6.9%. Sharp – who continues to sell fewer LCD TVs than Panasonic, incredibly – experienced a decline of 7% from Q4 ’10 to a 5.9% market share in Q4 ’11. These five brands accounted for 62.3% of the 74,236,000 TVs sold.
So what does this all mean? First, Samsung has clearly blown away everyone else in the TV industry, opening up a double-digit lead over their nearest competitor (LG) in market share. And those two guys waste time arguing about whether passive or active is better for 3D viewing?
Second, we’re seeing the slow, inexorable end of the Japanese television industry, just as we saw it happen in the United States in the late 1970s to the late 1980s. Sharp, Sony, and Panasonic are all hemorrhaging money for the current fiscal year that ends on March 31, and the consumer TV business is the primary reason.
When TVs sold for $50 per diagonal inch and up, there was plenty of money on the table for everyone. But now that mainstream TVs screen sizes (up to 55 inches) are selling for $10 – $15 per diagonal inch, the Japanese simply can’t compete anymore. And it will only get worse with Chinese TV brands Haier, Hisense, TCL, and others establishing beachheads on all continents.
Third, it’s over. The fat lady has sung. Samsung has won. They set out in the mid-1990s to beat Sony at their own game, and by any reasonable account, have succeeded beyond their wildest dreams. Samsung will make a nice profit on 2011 TV sales, and LG will at least get their LCD TV business back into the black.
But the story isn’t so pretty for Sharp, Sony, and Panasonic. Sharp still has no explanation for their continual slide in market share, which apparently began in 2005 and continued uninterrupted, and which has now idled (by some accounts) 50% of their LCD fab capacity. As for Panasonic, they’d already shut down one LCD and one plasma factory in 2011, because demand just isn’t there. And no one in Osaka knows how to fix the problem.
Sony is being pressured by financial analysts in Japan to get out of the TV business altogether, a decision which, as painful as it might be to management given Sony’s long and rich history with TV manufacturing, is probably the most sensible thing to do. The company’s TV business has lost money for eight straight years – never mind the strong market share numbers that popped up early on.
And it’s not going to get better any time soon, as DisplaySearch stated that 2011 worldwide TV shipments actually declined .3% in 2011, reversing six consecutive years of growth. Only the LCD TV category showed any increase with a bare-bones 1% uptick. Everything else was on a downhill slide, with plasma declining 7%, CRTs falling 43%, and RPTVs in a 51% tailspin.
Hitachi has already pulled the plug on their TV business. Toshiba and Mitsubishi will no doubt follow suit in the next 12-24 months. And that will leave us with the Hatfields & McCoys in Korea, plus a host of Chinese brands you may want to get familiar with. (The running joke at CES 2012 is that it was the “Chinese” Electronics Show, and that’s not far from the truth!)
The rout is on…