Posts Tagged ‘LCD TV’

A Tale Of Two Companies, Part II: The Best-Laid Plans…

In a recent post, I talked about Panasonic’s impressive financial turnaround from its last fiscal year, booking a nice profit after doing some soul-searching and consequent house-cleaning of underperforming business units. And I contrasted Panasonic’s performance with the struggles of Sony, who continues to struggle with red ink. Let’s take a few moments to revisit both brands.

Coincidentally, Panasonic held a couple of press days this week in New York City to talk about its 2014 TV lineup. I attended the Thursday session and can say that it was much more low-key than previous Panasonic TV events.

For 2014, the emphasis was on two things – 4K, and cloud connectivity. Panasonic introduced a new concept, LifeScreen, which is yet another search engine combined with a clever graphical user interface.  You pre-set your preferences, and your Panasonic TV searches for content to match them.

And how, exactly, does the TV know it’s you? Thanks to a pop-up camera and face recognition software, the TV comes to life when you stand or sit in front of it and loads up your programs choices. A new remote control provides both swipe control and voice recognition (shades of Samsung 2011!), and seems to work reliably.

Jay Park Presents 600p

Panasonic’s Jay Park fills us in on the 2014 TV lineup details.

Panasonic’s cloud structure isn’t much different than other manufacturers. You can download photos and video and share them with connected tablets and phones in your house. And you can upload your own photos and videos to the same online storage.

Now, to the nitty-gritty. As expected, the 2014 TV lineup is 100% LCD. What’s unexpected, but ultimately not surprising, is that you’ll find a mix of IPS and PVA LCD panels in these new TVs, meaning that Panasonic (like everyone else) is shopping for the best price and performance combination in LCD panels for their new TVs.

Given the cutthroat pricing in the TV market, this isn’t surprising and in fact is a smart strategy: There’s plenty of good LCD glass coming out of Korean, Taiwanese, and Chinese fabs, so why bother with the costs of making it yourself?

Panasonic's 2014 LCD TVs (center) predominantly use PVA glass and are quite improved over the 2013 models (right), holding their own against last year's ZT-series plasma (left).

Panasonic’s 2014 LCD TVs (center) predominantly use PVA glass and are quite improved over the 2013 models (right), holding their own against last year’s ZT-series plasma (left).

 

You can operate the 2014 TVs from an iPad, iPhone, or Android device - even to the level of a full grayscale and color calibration.

You can operate the 2014 TVs from an iPad, iPhone, or Android device – even to the level of a full grayscale and color calibration.

Panasonic’s value-add for these TVs is to improve the spectral response of the white LEDs used in these new sets, and it’s impressive. They’re claiming 98% coverage of the minimum DCI color space and have improved the rendering of yellow.

Side-by-side demos with last year’s award-winning ZT60 plasma TV showed the difference dramatically. Aside from the usual issues with PVA and IPS LCD panels, the images had excellent contrast, great color saturation, and decent black levels – and you can clearly see why plasma has fallen by the wayside.

There will be six series of models in the 2014 TV line-up, starting with the entry-level A400 and moving all the way up to the new 55-inch and 65-inch Ultra HD AX800-series TVs. The new remote and camera system come with three of these lines, and some models now include a sound bar (smart move!) in the box.

HDMI 2.0 and HEVC decoding are standard on the AX800, which is interesting considering how few Broadcom HEVC decoder chips have been deployed by TV manufacturers to date. And you can operate the TV from your iPhone or iPad (or Android device), even to the point of doing a full color and grayscale calibration, thanks to a new app.

So Panasonic remains a player in the TV game, even though the company’s worldwide market share fell out of the top five in 2013. Panasonic’s return to corporate profitability will take a lot of pressure off the TV division, which has relocated to San Diego from New Jersey.

In contrast, Panasonic’s neighbor down the street in San Diego – Sony – continues to struggle with red ink. The company released its final numbers for fiscal year 2013 last Thursday, and things still don’t look good, even though the picture is lightening up a bit.

For 2013, Sony booked a net loss of -¥125B (about $1.23B USD) with operating income of ¥26.5B (about $265M USD). There were a couple of operating divisions that continue to drag down profit, most notably Sony’s discontinued PC business unit, battery manufacturing, and disc manufacturing (DVD, Blu-ray) outside Japan and the U.S.

Sony’s long-struggling TV operations are reported as part of the company’s Home Entertainment and Sound business unit, which recorded a loss of -$248M for FY 2013. That’s actually a 70% reduction from FY 2012, which is a silver lining. Overall, the TV division saw its sales increase 30% Y-Y, which is more good news.

Another bright spot for Sony is its Imaging Products and Solutions (IP&S) division, which booked $256M in operating income. That’s not enough, however, to offset the -$729M operating loss from PC operations and the -$78M loss from the Game division. And an impairment charge of -$250M was assigned to the disc manufacturing business, adding more red ink.

Getting rid of the unprofitable PC business will definitely help next year’s results. (Apparently, so will the sale of Sony’s New York City headquarters on Madison Avenue, which netted almost $700M, according to the company’s financial statement.) The operating loss reported for the Game division (-$78M) was a surprise, but Sony attributed it to costs involved in launching the PlayStation 4 console and a $60M write-off of PC game software titles.

There’s no question that Sony has quite a mountain to climb and get back on the “plus” side of the ledger. Unlike Panasonic, Sony’s worldwide share of television shipments held pretty steadily in 2013 (about 7%, down slightly from 2012), but that number either has to go up or further cost-cutting must take place to make TV retailing worth continuing.

Sony also has to make a decision about its optical disc business unit. The Blu-ray Disc Association (BDA) hasn’t released a standard for 4K yet, while the Digital Entertainment Group’s numbers have shown pretty consistently over the past four years that digital media consumption is shifting emphatically to digital downloads and streaming. Given this trend, it’s not likely that the disc manufacturing unit will ever return to profitability and might also be a candidate for the axe by year’s end.

You know that old saying about the best-laid plans oft going astray? Hmmm…

CES 2014 In The Rear-View Mirror

Once again, CES has come and gone. It sneaks up on us right after a relaxing Christmas / New Year holiday. We’re jolted out of a quiet reverie and it’s back to the rush to board at the airport gate, walking the serpentine lines for taxis at McCarran Airport, and “late to bed, early to rise” as we scramble to make our booth and off-site appointments in Las Vegas.

We don’t make them all on time. Some we miss completely. But there’s a serendipity angle to it all: We might find, in our haste to get from one meeting to another, some amazing new gadget we didn’t know about as we take shortcuts through booths in the North, South, and Central Halls.

Or a colleague sends us a text or leaves a voicemail, emphatically stating “you have to see this!” Or a chance meeting leads to an ad hoc meeting, often off-site or over a hasty lunch in the convention center.

My point is this: You “find” as many cool things at the show as you “lose.” For every must-see product that you don’t see, there’s another one you trip over. Granted; many “must-see” products are yawners – you’ve figured it out 30 seconds into your carefully-staged meeting with PR people and company executives, and you’re getting fidgety.

LS Samsung Booth MCU 600p

My best CES discoveries involve products or demos where I can observe them anonymously, without PR folks hovering at my side or staring at my badge before they pounce like hungry mountain lions.

Unlike most of my colleagues in the consumer electronics press, I don’t need to break stories the instant I hear about them. There are already too many people doing that. What’s missing is the filter of analysis – some time spent to digest the significance of a press release, product demo, or concept demo.

And that’s what I enjoy the most: Waiting a few days – or even a week – after the show to think about what I saw and ultimately explain the significance of it all. What follows is my analysis of the 2014 International CES (as we are instructed to call it) and which products and demos I thought had real significance, as opposed to those which served no apparent purpose beyond generating daily headlines and “buzz.”

Curved TV screens: OK, I had to start with this one, since every TV manufacturer at the show (save Panasonic and Toshiba) exhibited one or more curved-screen OLED and LCD televisions. Is there something to the curved-screen concept? On first blush, you’d think so, given all of the PR hype that accompanied these products.

The truth is; really big TV screens do benefit a little from a curved surface, particularly if they are UHDTV models and you are sitting close to them. The effect is not unlike Cinerama movie screens from the 1950s and 1960s. (That’s how I saw Dr. Zhivago and 2001: A Space Odyssey back in the day.)

Toshiba described their version of the 21:9 widescreen LCD TV as having "5K" resolution - and mathematically, it does (I guess!).

Toshiba described their version of the 21:9 widescreen LCD TV as having “5K” resolution – and mathematically, it does (I guess!).

This wall of 56-inch curved OLEDs greeted visitors to the Panasonic booth.

This wall of 56-inch curved OLEDs greeted visitors to the Panasonic booth.

Bear in mind I’m talking about BIG screens here – in the range of 80 inches and up. The super-widescreen (21:9 aspect ratio) LCD TVs shown by Samsung, LG, and Toshiba used the curve to great effect. But conventional 16:9 TVs didn’t seem to benefit as much, especially in side-by-side demos.

The facts show that worldwide TV shipments and sales have declined for two straight years, except in China where they grew by double digits each year. TV prices are also collapsing – you can buy a first-tier 55-inch “smart” 1080p LCD TV now for $600, and 60-inch “smart” sets are well under $800 – so manufacturers will try anything to stimulate sales.

Is that the reason why we’re seeing so many UHDTV (4K) TVs all of a sudden? Partially. Unfortunately, there’s just no money in manufacturing and selling 2K TVs anymore (ask the Japanese manufacturers how that’s been working for them), and the incremental cost to crank out 4K LCD panels isn’t that much.

Chinese panel and TV manufacturers have already figured this out and are shifting production to 4K in large panels while simultaneously dropping prices. You can already buy a 50-inch 4K LCD TV from TCL for $999. Vizio, who is a contract buyer much like Apple, announced at the show that they’d have a 55-inch 4K LCD TV for $1299 and a 65-inch model for well under $2,000.

Hisense is building a factory in the U.S. to assemble TVs. And you wondered if they were serious about the North American TV business?

Hisense is building a factory in the U.S. to assemble TVs. And you wondered if they were serious about the North American TV business?

Vizio's 65-inch high dynamic range (HDR) 4K TV was very impressive.

Vizio’s 65-inch high dynamic range (HDR) 4K TV was very impressive.

Consider that the going price for a 55-inch 4K “smart” LCD TV from Samsung, LG, and Sony is sitting at $2,999 as of this writing and you can see where the industry is heading. My prediction is that all LCD TV screens 60 inches or larger will use 4K panels exclusively within three years. (4K scaling engines work much better than you might think!)

And don’t make the popular mistake of conflating 4K with 3D as ‘failed’ technologies. The latter was basically doomed from the start: Who wants to wear glasses to watch television? Not many people I know. Unfortunately, glasses-free (autostereo) TV is still not ready for prime time, so 3D (for now) is basically a freebie add-on to certain models of televisions.

4K, on the other hand, has legs. And those legs will get stronger and faster as the new High Efficiency Video Codec (HEVC) chips start showing up in televisions and video encoders. HEVC, or H.265 encoding, can cut the required bit rate for 2K content delivery in half. That means it can also deliver 4K at the old 2K rates, somewhere in the ballpark of 10 – 20 Mb/s.

Toshiba (like many others) is moving quickly to adopt and integrate HEVC H.265  encoding and decoding into their products.

Toshiba (like many others) is moving quickly to adopt and integrate HEVC H.265 encoding and decoding into their products.

Nanotech's Nuvola 4K media player costs only $300 and delivers the goods.

Nanotech’s Nuvola 4K media player costs only $300 and delivers the goods.

While consumer demand for 4K is slowly ramping up, there is plenty of interest in UHDTV from the commercial AV sector. And Panasonic focused in on that sector almost exclusively in their CES booth. I’m not sure why – there are plenty of inferences here; most significantly, it would appear that Panasonic is exiting the money-losing television business entirely. (Ditto nearby Toshiba, which had similar 4K “applications” showcased and which also did not exhibit a line of 2014 televisions.)

Long story short; you may be buying 4K televisions in the near future whether you want ‘em or not. It’s a manufacturing and plant utilization issue, and if commercial demand for 4K picks up as expected, that will drive the changeover even faster.

As for sources of 4K content; Samsung announced a partnership with Paramount and Fox to get it into the home via the M-Go platform. Comcast had an Xfinity demo for connected set-top-boxes to stream 4K, and of course Netflix plans to roll out 4K delivery this year direct to subscribers.

I’m not sure how they’ll pull that off. My broadband speeds vary widely, depending on time of day: I’m writing this at noontime and according to CNET’s Broadband Speed Test, my downstream bit rate is about 22 megabits per second (Mb/s). Yet, I’ve seen that drop to as low as 2 – 3 Mb/s during late evening hours, when many neighbors are no doubt streaming Netflix movies.

Even so, HEVC will definitely help that problem. I spoke to a couple of Comcast folks on my flights out to and back from CES, and they’re all focused on the bandwidth and bit rate challenges of 2K streaming, let alone 4K. More 4K streaming interface products are needed, such as Nanotech’s $300 Nuvola NP-H1, which is about the size of an Apple TV box and ridiculously simple to connect and operate.

LG's got a 77-inch curved OLED TV that can also flex. (Why, I don't know...)

LG’s got a 77-inch curved OLED TV that can also flex. (Why, I don’t know…)

nVidia built an impressive 3D heads-up display into the dash of a BMW i3 electric car.

nVidia built an impressive 3D heads-up display into the dash of a BMW i3 electric car.

Oh, yeah. I should have mentioned organic light-emitting diode (OLED) displays earlier. There were lots of OLED displays at CES, ranging from the cool, curved 6-inch OLED screen used in the new LG G-Flex curved smartphone to prototype 30-inch OLED TVs and workstation monitors in the TCL booth and on to the 55-inch, 65-iunch, and even 77-inch OLED TVs seen around the floor. (LG’s 77-inch offering is current the world’s largest OLED TV, and of course, it’s curved.)

OLEDs are tricky beasts to manufacture. Yields are usually on the low side (less than 25% per manufacturing run) and that number goes down as screen sizes increase, which explains the high prices for these TVs.

And there’s the unresolved issue of differential color aging, most notably in dark blue emitters. With current OLED science, you can expect dark blue emitters to reach half-brightness at about 5,000 hours of operation with a maximum brightness of 200 nits. Samsung addresses this quandary by employing two blue emitters for every red and green pixel on their OLED TVs, while LG has the more difficult task of managing blue aging in their white OLED emitters.

Several studies over the past three years consistently show people hanging on to their flat screen TVs for 5 to 7 years, which is likely to be a lot longer than 5,000 hours of operation. Will differential color aging rear its ugly head as early adopters shell out close to $10K for a 55-inch OLED TV? Bet on it.

Turns out, there’s another way to get wide color gamuts and saturated colors: Quantum dots. QDs, as we call them, are inorganic compounds that exhibit piezoelectric behavior when bombarded with photons. They emit stable, narrow-bandwidth colors with no drift, and can do so for long periods of time – long enough to work in a consumer television.

3M featured its quantum dot film (QDF) in several demos. An LCD TV equipped with it is at the top of the picture.

3M featured its quantum dot film (QDF) in several demos. An LCD TV equipped with it is at the top of the picture.

This prototype WiHD dongle turns any smartphone or tablet equipped with MHL or Micro HDMI interfaces into a 60 GHz wireless playback system.

This prototype WiHD dongle turns any smartphone or tablet equipped with MHL or Micro HDMI interfaces into a 60 GHz wireless playback system.

QDs are manufactured by numerous companies, most notably Nanosys and QD Vision in the United States.  The former company has partnered with 3M to manufacture an optical film that goes on the backside of LCD panels, while the latter offers Color IQ optical components that interface with the entire LED illumination system in edge-lit TVs.

Sony is already selling 55-inch and 65-inch 4K LCD TVs using the Color IQ technology, and I can tell you that the difference in color is remarkable. Red – perhaps the most difficult color to reproduce accurately in any flat-screen TV – really looks like red when viewed with a QD backlight. And it’s possible to show many subtle shades of red with this technology.

All you need is a QD film or emitter with arrays of red and green dots, plus a backlight made up of blue LEDs. The blue passes through, while the blue photons “tickle” the red and green dots, causing them to emit their respective colors. It’s also possible to build a direct-illumination display out of quantum dots that would rival OLED TVs.

How about 4K display interfaces? By now, you’ve probably heard that HDMI has “upgraded” to version 2.0 and can support a maximum data rate of 18 gigabits per second (GB/s).  Practically speaking; because of the way display data is transmitted, only 16 Gb/s of that is really available for a display connection. Still, that’s fast enough to show 4K content (3840×2160, or Quad HD) with a 60 Hz frame rate, using 8-bit color.

DisplayPort can now carry USB 3.0 on its physical layer. Here's an Accell DockPort breakout box with Mini DisplayPort and USB connections.

DisplayPort can now carry USB 3.0 on its physical layer. Here’s an Accell DockPort breakout box with Mini DisplayPort and USB connections.

Epson's Moverio glasses aren't as sexy as Google Glass - but then, they can do more things.

Epson’s Moverio glasses aren’t as sexy as Google Glass – but then, they can do more things.

Over at the DisplayPort booth, I heard stories of version 1.3 looming later this spring. DisplayPort 1.2, unlike HDMI, uses a packet structure to stream display, audio, and other data across four scalable lanes, and has a maximum rate of 21.6 Gb/s – much faster than HDMI. Applying the “20 percent” rule, that leaves about 17.3 Gb/s to actually carry 4K signals. And the extra bits over HDMI means that DP can transport 3840×2160 video with a frame rate of 60 Hz, but with 10-bit color.

Don’t underestimate the value of higher data rates: 4K could turn out to be a revolutionary shift in the way we watch TV, adding much wide color gamuts, higher frame rates, and high dynamic range (HDR) to the equation. HDMI clearly isn’t fast enough to play on that field; DP barely is. Both interfaces still have a long way to go.

So – why not make a wireless 4K connection? There were plenty of demos of wireless connectivity at the show, and I’m not just talking about Wi-Fi. Perhaps the most impressive was in the Silicon Image meeting room, all the way at the back of the lower South Hall, near the Arizona border.

SI, which bought out wireless manufacturer SiBEAM a few years ago, demonstrated super-compact 60 GHz wireless HDMI and MHL links using their UltraGig silicon. A variety of prototype cradles for phones and tablets were available for the demo: Simply plug in your handheld device and start streaming 1080p/60 video to a nearby 55-inch LCD TV screen.

Granted, the 60 GHz tech is a bit exotic. But it works quite well in small rooms and can take advantage of signal multipath “bounces” by using multiple, steerable antenna arrays built-in to each chip. And it can handle 4K, too – as long as the bit rate doesn’t exceed the HDMI 2.0 specification, the resolution, color bit depth, and frame rate are irrelevant.

This sort of product is a “holy grail” item for meeting rooms and education. Indeed; I field numerous questions every year during my InfoComm wireless AV classes along these lines: “Where can I buy a wireless tablet dongle?” Patience, my friends. Patience…

LG was one of many companies showing "digital health" products, like these LifeBand monitors.

LG was one of many companies showing “digital health” products, like these LifeBand monitors.

You can now buy the concave-surface LG G-Flex smartphone. But I don't think you'll see any of these in the near future...

You can now buy the concave-surface LG G-Flex smartphone. But you won’t see any of these in the near future…

The decline in TV shipments and sales seems to be offset by a boom in connected personal lifestyle and health gadgets, most notably wristbands that monitor your pulse and workouts. There were plenty of these trinkets at the show and an entire booth in the lower South Hall devoted to “digital health.”

Of course, the big name brands had these products – LG’s LifeBand was a good example. But so did the Chinese and Taiwanese manufacturers. “Digital health” was like tablets a few years back – so many products were introduced at the show that they went from “wow!” to “ho-hum” in one day.

This boom in personal connectivity extends to appliances, beds (Sleep Number had a model that can elevate the head of the bed automatically with a voice command), cars (BMW’s i3 connected electric car was ubiquitous), and even your home. Combine it with short-range Bluetooth or ZigBee wireless connectivity and you can control and monitor just about anything on your smartphone and tablet.

Granted; there isn’t the money in these small products like there used to be in televisions. But consumers do want to connect, monitor, and control everything in their lives, and their refrigerators, cars, beds, televisions, percolators, and toasters will be able to comply. (And in 4K resolution, too!)

PointGrab can mute a TV simply by raising a finger to your lips!

PointGrab lets you mute a TV simply by raising a finger to your lips!

Panasonic downplayed TVs at CES, but had a functioning beauty salon in their booth (by appointment only..)

Panasonic downplayed TVs at CES, but had a functioning beauty salon in their booth (by appointment only..)

Obviously, I didn’t visit the subjects of gesture and voice control. There were several good demos at the show of each, and two of the leading companies I showcased last year – Omek and Prime Sense – have been subsequently acquired by Intel and Apple. Hillcrest Labs, PointGrab, and other had compelling demos of gesture control in Las Vegas – a subject for a later time.

Summing up, let’s first revisit my mantra: Hardware is cheap, and anyone can make it. Televisions and optical disc media storage are clearly on the decline, while streaming, 4K, health monitoring, and wireless are hot. The television manufacturing business is slowly and inexorably moving to China as prices continue their free-fall.

The consumer is shifting his and her focus to all the devices in the home they use every days; not just television. Connectivity is everything, and the television is evolving from an entertainment device into a control center or “hub” of connectivity. The more those connections are made with wireless, the better – and that includes high-definition video from tablets and phones.

It’s going to be an interesting year…

 

 

 

 

 

 

 

 

 

 

The Diverging Fortunes of Sony, Panasonic, and Sharp: Is There Life After Television?

Last week; Sony, Panasonic, and Sharp announced their financial reports for Q2 2013. And it’s clear that all three would benefit from phasing out the production and sales of televisions.

Panasonic, who is on track to shut down production of plasma display panels by the end of the current fiscal year in March of 2014, turned in a strong performance and raised its operating profit forecast to $2.75B, according to a story on the Reuters Web site.

The company posted a net profit of $627M for the period from July through September, helped by strong sales of automotive and battery products. This number just exceeded an estimate of $621M by industry analysts.

The surge of black ink was helped by downsizing plasma TV operations, along with semiconductor and smartphone manufacturing. Panasonic also concluded a sale of 80% of its healthcare business unit to KKR for about $1.7B.

Not long after saying the company would increase shipments of lithium ion batteries to carmaker Tesla Motors by nearly 2 billion cells through 2017, Panasonic also announced it will exit plasma TV manufacturing, which along with its LCD TV operations lost $261M in the second quarter.

Down the road, Sharp (who operates the world’s largest LCD fab in Sakai, Japan) managed to pull a rabbit out of its hat and announced a profit of $138M for the same quarter, largely due to increased demand for solar cells and a weaker yen against the dollar.  Just one year ago, Sharp had a $5.5B net operating loss and required transfusions of cash from Samsung (2012) and Qualcomm (2013) to stay open.

While both companies have seen a steady decline in their worldwide TV market share (Panasonic dropped 26% from a 7.8% share in 2011 to 6% in 2012, while Sharp plummeted 22% from 6.6% to 5.4%), they’ve obviously figured out that it’s time to re-focus their efforts on more profitable products and are making progress in that direction.

Not so Sony, who evidently never heard Einstein’s famous definition of insanity as “…repeating an experiment and expecting different results.” Sony’s latest financials showed a net operating loss of $197M for the 2nd quarter, largely attributable to its TV operations. The fact that Sony Pictures also had a disappointing quarter didn’t help.

The TV group lost $95M between July and September after recording a $53M profit during the previous quarter. Sales of cameras, camcorders, and Vaio computers were also weak, with only smartphones showing any strength. The company also has high hopes for its PlayStation 4 platform, which will debut later this month.

Still, analysts aren’t convinced that Sony’s strategy to maintain its traditional consumer electronics products presence will work anymore. In a related Reuters story, Makoto Kikuchi, CEO of Tokyo-based Myojo Asset Management, was quoted as saying, “I still cannot see any fundamental and believable strategy for the rebirth of Sony’s electronics business. On the other hand Panasonic, which is shifting its business away from consumer electronics, is reporting better-than-expected results. The contrast is like night and day.”

Let’s be clear: Neither Panasonic or Sharp is out of the woods yet – far from it. Panasonic’s TV operations took an even bigger hit than Sony (-$261M) in Q2 ‘13, and Sharp is still sitting on the edge of bankruptcy. But Sony’s insistence on maintaining a losing CE presence may cost it dearly: Moody’s is apparently considering dropping Sony’s credit rating to junk status.

The fact is; Japanese manufacturers can’t sell TVs and remain profitable anymore; not as long as Samsung and LG maintain aggressive pricing and newcomers like Hisense, Haier, and TCL crash the party (not to mention discount giant Vizio).

And the move to 4K won’t help. Although Sony, Sharp, and Panasonic all have 4K LCD TVs at retail for about $80/inch, the Chinese appear primed for a 4K TV price war that they will inevitably win. Consider that without China, the worldwide market for TV shipments actually declined in 2012 by 4%. Add China to the mix, and it’s an eight-point upward swing.

To sum up; Panasonic seems to have gotten religion, while Sharp is still sobering up. But Sony apparently needs an intervention. Will disgruntled shareholders and/or downgraded credit and a higher cost of borrowing force the issue? Stay tuned…

Panasonic’s 2012 Home Entertainment Media Briefing – Pete Putman

Senior product manager Jason Gastman walks us through the 2012 TV lineup.

Panasonic’s 2012 TV and home entertainment line show took on extra importance this year, what with the company closing in on a $9.7 B (as in “billion”) loss for the fiscal year that will end on Friday, March 30. To be accurate, a substantial portion of that red ink is due to a goodwill accounting write-down on the 2009 acquisition of Sanyo, which will cease to exist as a corporate entity after Friday.

 

But the remainder is largely attributable to consumer electronics operations; specifically, the television business. Think about it: Just five years ago, a 42-inch plasma TV with 1080p resolution retailed for over $2,000. Now, the price is about 1/3 of that, meaning the cost per diagonal inch for that TV has dropped from about $47 to $15. (Real-world example: I paid $1,100 for a TH-42PX80U 42-inch 1080p Panasonic plasma in September of 2008.)

 

Frankly, Japanese TV manufacturers can’t be profitable at that price point, which is why Panasonic (along with Sony, Sharp, and other TV brands) are having such a miserable year financially.

 

But Panasonic was ‘different’ from the other guys in that it promoted plasma display technology as a differentiator. And Panasonic did (and still does) plasma better than anyone else, now that the late, lamented Pioneer plasma lineup has faded into history.

 

The focus on plasma meant that for years, there was a ‘green line’ between plasma screen sizes and LCD TV sizes that Panasonic simply would not cross. That line – 42 inches – was breached slightly in 2011 with the introduction of a couple of LCD TVs that used the company’s IPS-Alpha LCD alignment layer. (IPS stands for ‘in-plane switching’ and was originally developed by Hitachi. LG also uses a variant of IPS extensively in their LCD TV product line.)

The VIERA CONNECT menu is different for 2012, and adds some exclusive content partnerships.

 

This year, all bets were off as Panasonic blew by the ‘green line’ with 42-inch, 47-inch, and even 55-inch LCD TVs. And except for a couple of bargain-basement 42-inch 720p models and one 3D iteration, smaller Panasonic plasma TVs are now becoming history. The TC-P42X5 (720p) is tagged at $429.99 (meaning it will be the first 42-inch plasma to sell for less than $400 at an everyday price), while the TC-P42XT50 will retail at $650. The 50-inch XT50 also supports 3D playback.

 

The LCD usurpers all fall into the VIERA E50 series, which includes the TC-L42E50 ($900), TC-L47E50 ($1,100), and TC-L55E50 (price TBA). All three models use LED backlights and have 1080p resolution; VIERA Connect; social networking TV function; DLNA; a PC input; four HDMI terminals and two USB ports. And all models are ‘WiFi-ready’ (you have to buy a separate USB dongle and plug it in).

 

Back to plasma: The ‘top of the line’ models for 2012 are in the ST50 series, and include (quoting from the press release) “…Infinite Black Pro Panel; Full HD 3D; VIERA Connect™ with a web browser and built-in WiFi; 1080p Full HD resolution; 2500 FFD (Focused Field Drive); fast switching phosphors; 2D ? 3D conversion; Social Networking TV which allows the user to simultaneously view a program on the TV and connect with their Twitter and/or Facebook account on the same screen ; 3D Real Sound with 8-train speakers –eight dome type micro speakers with reflectors that deliver wide ranging, high quality sound; a new louver filter; Media Player;  Bluetooth; DLNA; VIERA Link™; three HDMI connections and two USB ports.” (Wow, let me catch my breath for a moment…)

The TC-P50ST50 plasma line is loaded for bear. So why does it offer only three HDMI inputs?

 

Does that sound like the feature set of a TV, or of a computer? The ST50 plasma sets actually have a dual-core processor, and with all of the listed input and output ports – plus all of the apps, streaming capabilities, WiFi, and other features – they basically ARE computers, albeit fitted with very large plasma monitors. You can get ‘em in sizes ranging from 50 inches (TC-P50ST50, $1,400) to 65 inches (TC-P65ST50, price TBA).

 

For ‘Full HD 3D’ plasma viewing (their wording), Panasonic offers the UT50 series, which starts at 42 inches (TC-P42UT50, $800) and goes all the way to 60 inches (TC-P60UT50, ($1800 – and no, I don’t know why there isn’t a 65-inch SKU in this lineup.) UT50 plasma TVs are all 1080p resolution, with VIERA Connect (you need to buy the WiFi dongle separately), media player, faster switching phosphors, Bluetooth connectivity, DLNA operation, two HDMI connections (Why only two? There are three on the ST50 series!), and dual USB ports.

 

Now, here’s the weird part. Panasonic, along with Samsung and Sony, launched the Full HD 3D initiative (read the press release here) in 2011, and at CES 2012, demonstrated interoperability between different models of active shutter 3D glasses. The goal was to educate and inform consumers that active shutter 3D TV is a very different (and better) animal than the passive 3D TVs that employ circularly-polarized eyewear and deliver half the vertical picture resolution. (LG is the biggest proponent of passive 3D, which is similar to the process used in 3D movie theaters.)

 

So – you’d think Panasonic would be firmly behind active shutter? Guess again. The new line of ET5-series LCD TVs uses film-patterned retarder (FPR) LCD panels and have most of the bells and whistles of the VIERA line, including built-in Wifi, 2D to 3D conversion, the internal media player, DLNA compatibility, and the social networking TV functions.

Full HD 3D is the only way to go! (Except when it isn't.)

 

Oddly enough, the ET5 TVs come with four HDMI inputs, which is more than any other model range. And of course, you get four pairs of passive 3D glasses with each TV, starting with the TC-L42ET5 ($$1,100) and continuing with the TC-L47ET5 ($1,300) and TC-L55ET5 ($1,900).

 

When I asked Panasonic representatives why they continue to support both plasma and LCD in the same screen size, even though plasma TV sales accounted for only 13.5% of the worldwide market last year, they replied that there was still enough demand for the product through ‘niche’ dealers, especially in the larger sizes. That’s probably true for the high-end VXT products, but I don’t see how any 42-inch plasma will be in the line next year – and 50-inch sizes may also be heading towards the endangered species list if those market share numbers keep dropping.

 

I got a similar answer when I asked Panasonic to reconcile its emphatic support for active shutter 3D with the launch of several passive 3D TV models. The reply was something to the extent that these models didn’t have all of the goodies of the UT50 series (but they do have more HDMI inputs!) and that the company was simply responding to consumer demand.

Jonesing for connected Blu-ray players? Panasonic's got six of 'em.

 

OK, let’s take a closer look at what’s really happening. First, Panasonic sells a lot of LCD TVs. (In fact, they sold more of them back in 2010 than Sharp did!) But for all of 2011, the market leader in combined LCD and plasma TV sales was Samsung, capturing 26% of the business in the fourth quarter. Panasonic was way back in fourth place with 6.9% of the market. According to NPD DisplaySearch, this was the first time that someone other than Panasonic led in worldwide plasma TV shipments.

 

Remember about six years ago when Panasonic announced it was building new plasma fabs that would ultimately give it the capacity to roll out 11 million plasma TVs a year? The ENTIRE plasma TV market for 2011 was 5.2 million units, a decline year-to-year of 8%. Overall, plasma TV shipments accounted for just 13.5% of the worldwide total.

 

As a result, Panasonic has idled a good portion of its plasma manufacturing capacity, along with a lot of its LCD capacity. Across the board, Panasonic’s TV revenue share declined 19% from 2010, which is a big contributor to all the red ink I mentioned at the start of this article. So the company’s 2012 TV marketing strategy may be more along the lines of “Let’s throw everything at the wall and see if anything sticks!”

 

Truth be told, we are probably looking at the demise of plasma as a consumer TV display technology in the not-too-distant future. Panasonic will eventually run into the same buzz saw that sliced up Pioneer – too much fab capacity and not enough market demand. It’s a great idea on paper to say you’ll continue to support plasma in the high-end and niche markets, but there comes a point where it just doesn’t make sense economically to stay in the business – and Panasonic is already staring at unprecedented losses for the year.

 

As for 3D, the DisplaySearch numbers show that TV purchases that were specifically tied to 3D capability amounted to about 7% of all TVs sold in North America in the third quarter of 2011 (the latest quarter for which I could find numbers). Active shutter or not, 3D TV just isn’t selling well on this part of the planet, but Panasonic’s support for passive 3D makes no sense at all – it’s not like the numbers are going to change as a result.

Now, there's a remote control you don't see every day. (Notice the button dedicated to Netflix streaming?)

 

In another portion of the demo room, Panasonic showed just how good its black levels are on 2012 plasma TV models, compared to 2011. Excuse me, but I recall seeing this same demo for the past six years, and the black levels on my 2008 model are already excellent – measuring below .1 nits on average. The 2011 VIERA ‘before’ plasma I observed had black levels resembling a 2006-vintage LCD TV, and didn’t look right to me. It’s time to retire this demonstration!

 

Oh, I almost forgot: There will be six new Blu-ray players in the line this year, three more than are really necessary. Four of them fall into the Smart Network 3D Blu-ray category, starting with the top-line DMP-BDT500 ($350) and stepping down through the DMP-BDT320 ($200) to the DMP-BDT220 ($150). There’s also the very compact and stylish DMP-BBT01 ($270), which can operate horizontally and vertically.

 

All four models offer (and I quote from the press release again) “…an improved UniPhier chip processor, 24p output for VOD, an expanded VIERA Connect functionality, and FLAC (Free Lossless Audio Codec),192Hz/32bit Audio DAC (not available on the DMP-BBT01), Smartphone remote control capability, a new touchpad remote control (available on DMP-BBT01, DMP-BDT500, DMP-BDT320),  2D-to-3D up-conversion2, which can convert 2D images from VIERA Connect1,  DVDs and Blu-ray discs into 3D with natural depth perception, a new slim design and a unique slot-in drive that is found in two of the models (the DMP-BBT01 and DMP-BDT320).”

 

Two non-3D players also make their debut. The DMP-BD87 will retail for $120, while the DMP-BD77 is the entry-level model, priced at $90. The difference? Built-in WiFi on the DMP-BD87, while you’ll need the accessory USB dongle for the DMP-BD77. Both models (and the four 3D versions) are also ‘Smart VIERA’ enabled and support the most popular Internet TV sources, including Netflix, YouTube, CinemaNow, Vudu, and Hulu Plus.

 

The reality of most Blu-ray player purchases is that people are buying them primarily to get inexpensive access to Netflix, YouTube, and Hulu. These three services account for something like 80% of all video streaming these days, and a connected Blu-ray player is a great way to add streaming to an older (but not THAT old) LCD or plasma TV – like mine.

 

Panasonic also has some new, more ergonomic remote controls for its TVs and Blu-ray players. One of them has just a few buttons and a touch pad, similar to those found on notebook computers. (Oh wait, I forgot – TVs are basically computers nowadays…)

 

So there you have it – plasma TVs to 65 inches, LCD TVs with LED backlights to 55 inches (and very likely to 60 inches in short order), and both active and passive 3D TVs. Something for everybody in 2012!

 

Come to think about it, this roster reads a lot like the LG TV lineup from 2009, and we all know what eventually happened to their active 3D TV line…

 

The Rout Is On – by Pete Putman

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…