Posts Tagged ‘Sharp’
4K, Collapsing Prices, and the Declining Importance of Hardware
- Published on Thursday, 10 September 2015 12:24
- Pete Putman
- 0 Comments
As I write this, the 2015 season of the National Football League is about to get underway, with last year’s Super Bowl champion New England Patriots taking on the Pittsburgh Steelers. If you’re not a football fan, why should you care?
Simple: Football, more than any other sport or event, drives the sale of televisions. And the TV business is in a major funk right now.
According to IHS’ latest survey of the global television market, worldwide shipments of TVs fell an astounding 8 percent Y-Y during the second quarter of 2015. Even though LCD TVs now account for almost 99% of all TV shipments, “…LCD TV sales have not made up for the lost volume of cathode-ray tube (CRT) and plasma televisions, which have largely left the marketplace.”
The one bright spot? 4K. The IHS report states, “4K TV was a bright spot in the global TV market, with unit shipments growing 197 percent year over year in Q2 2015, to reach 6.2 million units. The growth in 4K TVs is the direct result of increased price erosion and more affordable tiers of 4K models becoming available.”
I’ve written on numerous occasions that we’re on the cusp of an industry switchover from 1080p resolution to Ultra HD (3840×2160) for precisely this reason, plus the fact that it’s becoming increasingly difficult to make any money on the manufacturing and sales of 1080p-resolution LCD panels. That’s part of the reason that Sharp – once the premier brand of LCD televisions – finally threw in the towel and exited the North American television business, selling their Mexican factory and “Sharp” brand to Hisense.
Need proof? Check out the most recent HH Gregg and Best Buy circulars. You can now buy a 48-inch Haier 1080p LCD TV for $298 or a 60-inch LG 1080p smart TV for $898. Want Ultra HD resolution instead? Samsung’s got a curved 55-inch smart model for $1198, and a 60-inch smart set for $1498.
But here’s the kicker: Samsung’s HDR Ultra HDTVs (S-UHD) are almost the same price. A 50-inch model (UN50JS7000) is tagged at $1098 by HH Gregg, while the 55-inch version is $1298. Too expensive? Sharp’s got a 43-inch Ultra HD offering for $598, a 50-inch set for $748, and a 55-inch version for $848. (Not to be left out, LG has cut the price on their 55-inch smart Ultra HDTV to $998, and they’ve also got a 49-inch UHD set for $798.)
Now, step back from that mass of numbers, and think about this: Those are insanely low prices for Ultra HDTVs, which were tagged around $15 – $20K when they first came to these shores in 2012. I know of several friends and acquaintances that had to replace older TVs recently, and every one of them bought an Ultra HD set because of these falling prices.
If overall sales of TVs are falling but 4K TV sales are increasing, it doesn’t take a weatherman to see which way the wind is blowing: 4K and Ultra HD are rapidly taking over the TV marketplace for sets larger than 42 inches. This is happening so quickly that by the end of next year, ALL TVs larger than 50 inches will be Ultra HD models.
There’s a bigger message here. The money isn’t in hardware anymore – it’s moving to software. I find it hard to believe that I would spend more in a year for cable TV and Internet service than the cost of an Ultra HDTV, but that’s exactly what’s happening. Content is king, and who cares about the hardware?
So, why are TV sales in decline? It could be for a very simple reason, and that is the average household has a large-enough TV with enough bells and whistles that they see no reason to upgrade. If you already own a 55-inch or 60-inch 1080p set with “smart” functions ( and the all-important Netflix streaming), then the speed of your Internet connection is much more important than adding another 5 inches in screen size or quadrupling your screen resolution.
There’s a corollary in the world of tablets, where sales and shipments are also slowing down much faster than analysts predicted. There are any number of reasons why, but the two most likely culprits are the shift in preferences for larger smartphone screens (“phablets”) and the fact that people just hang onto tablets longer (at least, until their batteries die), often passing them down to children or off to relatives when a new model is purchased.
This shift to 4K and Ultra HD resolution is also impacting the commercial AV industry, which is heading for some serious interfacing issues. More and more of the large displays that will be installed will have Ultra HD resolution. And that will create a major headache for integrators, as the predominant interface for pro AV is still HDMI 1.4, even though version 2.0 was announced two years ago.
None of this is good news for the projector manufacturers, who are struggling to defend their turf from the large, cheap LCD displays. Unlike panel manufacturers, projector brands are moving slowly to adopt 4K resolution, which isn’t surprising because of the cost involved to tool up and manufacture microdisplays with 4K resolution and the much smaller market for projectors.
As for the naysayers who still think 4K is a fad, I would just advise them to wake up and smell the coffee. The world of consumer electronics absolutely drives the world of commercial AV – what’s happening over there is going to happen here, and that means you as an integrator will be installing more and more displays with UHD resolution; from desktop monitors and TVs to single-panel and tiled wall-mounted displays.
Count on it!
We’re Not Having Fun Anymore…
- Published on Tuesday, 04 August 2015 16:49
- Pete Putman
- 0 Comments
Last Friday (7/31), Sharp Corporation made the announcement that they would finally throw in the towel and withdraw from marketing and selling televisions in “the Americas,” opting to sell the company’s LCD TV manufacturing plant in Mexico to emerging Chinese CE giant Hisense.
Sharp also indicated that it would allow Hisense to sell TVs on this side of the Pacific that are branded with the Sharp name. (Hitachi, JVC, and Toshiba have similar arrangements.) This announcement came just months after the announcement that industry marketing veteran Peter Weedfald was being hired by the company, presumably to try and turn the U.S. consumer electronics operation’s fortunes around.
Sharp also had a nice line show of nine new Ultra HD (4K) TVs back in May, signifying a commitment to the U.S. TV market. Now, it appears everything was for naught.
This has to be quite a blow to the ego of the company that basically created the LCD television business, and that just 9 years ago held a 21% worldwide market share in LCD TV shipments. Today? They’re not even on the radar, having ceded ground to Samsung, LG, Sony (who also is struggling), and most recently, Hisense and TCL.
But it’s the right move. The company’s world-largest Generation 10 LCD fab in Sakai, Japan became a white elephant almost immediately as the world went into a recession in 2008-2009. Pressed for cash, Sharp sold 46% of the Sakai fab capacity to Hon Hai Precision Industries for about 20 cents on the dollar not long after the plant opened.
Several years of red ink followed, as did numerous rounds of financing. In the 1st quarter of this year (April – June), Sharp booked an operating loss of 28.8 billion yen ($231.87 million), down from a 4.7 billion yen profit a year prior, with a net loss of 34 billion yen ($270 million). The company still maintains it will be profitable to the tune of 80 billion yen ($644 million) by the end of March 2016.
According to a Reuters story, Sharp’s CEO Kozo Takahashi was “…open to major restructuring including some kind of strategic deal for its LCD business.” It’s well-known that Hon Hai CEO Terry Gou would love to buy the Sakai facility – he already owns almost 50% of its capacity, and Hon Hai subsidiary Foxcon sources LCD glass from Sharp for various Apple i-products. Gou also stated earlier this year that he would be willing to put more money into Sharp in exchange for a seat on its board.
While Sharp continues to wrestle with black ink, Sony posted what appeared to be positive financial results for its 1st quarter. The once-formidable CE brand logged an operating profit of 97 billion yen ($781 million), far exceeding the estimates of financial analysts.
There’s no question that camera sensor manufacturing is a lucrative business for Sony. Hundreds of millions of cameras and phones use Sony sensors, and the company announced a few months ago that it would expand sensor manufacturing capacity at two plants in Japan.
The strong first quarter was helped by an increase in operating income for its gaming (PlayStation) division of 350% to 19.5 billion yen ($153 million). So everything is coming up roses in Tokyo – right?
Not really. Sony’s beleaguered mobile phone division strung up a loss of 22.9 billion yen ($184 million) for the same quarter, and according to a Reuters story, the company is now predicting a loss of 60 billion yen ($483 million) for the fiscal year that ends next March, citing “a significant decrease in smartphone unit sales resulting from a strategic decision not to pursue scale in order to improve profitability”.
Drilling down into Sony’s Q1 FY2015 Consolidated Financial Results, the Home Entertainment and Sound group posted 168.9 billion yen ($1.36 billion dollars) in sales during Q1, with operating income of just 7 billion yen ($56 million). (That is a margin of 4.1%.) Sales were down 13.8% from the same period last year due to a “…decrease in unit sales of LCD televisions, mainly in the mid-range” and a “decrease in home audio and video unit sales reflecting contraction of the market.”
For all of 2014, Sony sold 14.6 million LCD TVs. Their current forecast calls for 11.5 million to be sold by the end of next March, a drop of 21% Y-Y. (2.6 million LCD TVs were sold by the company in the first quarter.) The TV business has long been a cash-sucker and Sony has been racking up losses in this market segment for a decade.
If Sony was to cut loose its mobile and home entertainment businesses, it would be quite the profitable company. For that matter, even the digital camera segment is seeing a downturn, as the year-long forecast for camera sales (5.9 million units) represents a drop of 30% from last year’s numbers – which were 26% down from 2013.
Aside from PlayStation, the long-term view for Sony’s consumer business isn’t good. Cameras in general are being displaced by smartphones, and even powerhouses like Samsung are seeing their mobile phone business decline as Chinese companies gain more market share in Asia.
And it’s pretty clear what’s happened to the Japanese TV business – only Sony, Sharp, and Panasonic retain a presence in the United States, and Sharp just announced it’s getting out. Look for Panasonic to do the same by year’s end, as their market share is miniscule and supporting continued sales of televisions doesn’t make much sense financially.
That just leaves Sony, who once proudly exclaimed that they had a chain of products “from lens to screen.” Well, that was in the good old days, when everyone was having a great time selling consumer electronics.
But we’re not having fun anymore…
The Dog Days of Summer…and UHDTV
- Published on Thursday, 16 July 2015 16:01
- Pete Putman
- 0 Comments
Ahhh, summertime: When everyone’s thoughts turn to cookouts, the beach, ice cream, baseball games, driving with the top down (or moon roof open), miniature golf – I could go on, but you get the idea.
One of the things most people are NOT thinking about is buying a new TV. Sure, there’s plenty to watch, but most of us would rather be outside in the nice weather. (Kayaking is my thing this time of year).
Even so, prices continue to drop across the board on all screen sizes, even on UHDTVs. Consider HH Gregg’s flier from last Sunday, where Sharp is now advertising its new line-up of discounted Ultra HDTVs for some eye-popping prices. How about $600 for the 43-inch LC43UB30 “smart” TV? Or $800 for the 50-inch LC50UB30? Both of those prices represent $200 discounts off full retail, which was already low.
There’s even a 55-inch model, the LC50UB30, for a grand. That’s Vizio territory when it comes to pricing and shows you how determined Sharp is to get back in the TV game and recapture some of the old magic from a decade ago.
Even the newest technologies are being discounted. Samsung’s HDR-ready S-series of UHDTVs are seeing substantial price cuts, with the 55-inch UN55JS8500 trimmed by $1,000 to $1998 and the 65-inch UH65JS8500 marked down to $2998. Curved models have seen an even bigger cut of $1500 off full book (UN55JS9000 is $2498 and UN65JS9000 is $3498).
Even LG’s new OLED TVs aren’t immune. The company ran a week-long promotion earlier this month with substantial discounts. The 55EG9600 was dropped to $5,500 from $6,000, while the 65EG9600 saw its price cut by a whopping $2,000 from $9,000 to $7,000.
And back around the 4th of July, their older 55EC9300 1080p OLED TV saw a price drop to $2,300. That price has since risen back to $2,500, which is quite a discount from when it first came out two years ago and was tagged at $15,000!
Don’t need a UHD set yet? Haier would be happy if you bought one of their new 50E3500 50-inch 1080p LCD TVs, and it will only set you back $370.00 – which works out to an amazing $7.40 per diagonal inch, a new low for LCD TVs. If 50 inches isn’t big enough, Haier’s got a 55-inch model (55E3500) for $400, which is almost as good a deal.
Given the number of UHDTVs that are now priced at or below $1,000, you can expect the shift from 1080p to 4K in larger TV screen sizes to accelerate. I had figured we’d see the majority of TVs 50 inches and larger move to 2160p resolution by the end of 2017. Now, I’m beginning to think it will happen even faster – maybe by the 4th quarter of next year.
Either way, there’s no question that your next TV purchase will bring you a lot more bang for the buck. With 43 inches now the most popular screen size, you’ll be able to buy two 1080p models at a time for what one cost a year ago. And the way things are trending, you may want to consider making the move to 4K if you are upgrading over the holidays.
For now, you can just enjoy swinging in your hammock with a nice cool glass of lemonade while the birds chirp, the bees buzz, and July turns into August. There will be plenty of time to ruminate on the features sets of new TVs this fall…
Sharp Makes a Big Play for Ultra HDTV
- Published on Friday, 12 June 2015 17:50
- Pete Putman
- 0 Comments
Last Wednesday, Sharp held a TV showcase in Lower Manhattan and showed that they’re still committed to the North American television market. Said commitment came in the form of nine models of Ultra HD (3840×2160) sets, ranging in size from 43 inches to a wall-sized 80-inch model.
Some background is useful before I proceed. Nine years ago, Sharp was the #1 retailer of LCD TVs in the world, commanding a 21% market share and leaving Korean competitors LG and Samsung eating their dust.
But time changes everything. Since then, Sharp’s WW market share has steadily declined to the point that the brand is usually classified with “other” when analysts release their quarterly and annual rankings for shipments and revenue share. Part of that is due to the guerilla marketing and sales strategies employed by both Samsung and LG: The first company remains comfortably in 1st place with a 27% market share, while LG is a distant 2nd with 15%.
Many of the once-famous Japanese brands have fallen by the wayside since then. Hitachi abandoned the U.S. TV market several years ago, and Mitsubishi had no choice but to get out as its rear-projection designs fell out of favor. Toshiba announced last year it would retreat to Japan, and Panasonic seems to have shifted its corporate focus to more profitable commercial products and solutions. (How many Panasonic TVs have you seen in stores lately?)
That leaves Sony and Sharp, and I’ve documented in great detail the former’s legendary missteps with consumer products and televisions. Indeed; Sony still has an 8 % WW revenue share in TV, but that number has been in slow decline for some time and the red ink continues to pile up in Sony’s TV (and mobile phone) business units.
So, back to Sharp. Unlike other Japanese brands, Sharp stands alone in having a completely vertically-integrated TV business: They manufacture the LCD panels at their world’s-largest Gen 10 facility in Sakai, Japan. They were the first company to master high yields on the all-important faster and energy-efficient IGZO TFT technology, which is used widely on their TVs. And they can still make larger cuts of LCD glass cheaper than anyone else – for now.
But Sharp has had a bad stretch of fiscal years, losing over a billion dollars just a few years ago and almost going bankrupt. Their lender banks are getting weary of issuing IOUs and even the assistance of both Qualcomm and Samsung were needed a couple of years ago to keep the doors open. (Both companies are now minority owners.)
The Gen 10 Sakai fab itself is nearly half-owned by Hon Hai Precision Industries, owners of Foxcon and manufacturers of Apple’s iStuff. And the chairman of Hon Hai, Terry Gou, wants to put more of his money into Sharp, but wants a seat on the board – something that is being met with less than enthusiasm in Osaka.
The company really is at a crossroads with respect to their consumer TV business. Sharp has been around for so long in the U.S. that some readers may remember owning a Sharp LCD calculator, or fax machine. And the brand has a perception of being “old school” and stodgy. (Witness their use of Baby Boomer idol George Takei, famous for his role in the 1960s TV series Star Trek, to promote the company’s Quattron technology a few years back.)
Unlike Samsung and LG, Sharp doesn’t have a presence in tablets, and is a very minor player in smartphones. Sharp also sold lots of appliances back in the day, but not that long ago a sales associate for a major brick-and-mortar chain located near me said, “No one comes in asking for Sharp products anymore.”
Nevertheless, the company continues to push forward. They made a bold but perhaps wise move in bringing back industry veteran Peter Weedfald to try and shake things up. Weedfald is now senior VP for sales, and he’s got quite an obstacle course in front of him to return the company to a competitive position.
The new Ultra HDTVs may help, if Weedfald is successful in generating “buzz” about them. There are three series: The Aquos UB30 sets are value-priced Ultra HD models, and include 43” (42.5” diagonal), 50” (49.6” diagonal), 55” (54.6” diagonal) and 65” (64.5” diagonal) Class screen sizes, with the 43” and 50” offerings priced at $799.99 and $999.99, respectively. The 55” model will retail for $1,299.99 and the 65-inch version will be ticketed at $2,399.99.
All four models support 4K streaming and have built-in HEVC H.265 and VP9 codecs and Sharp’s Revelation 4K upscaling engine. HDMI 2.0 inputs with HDCP 2.2 are also standard, although I couldn’t tell how many. Stepping up one level finds the UH30 series of Ultra HDTVs. The UE30 series includes models in 60” (diagonal.), 70” (69.5” diagonal) and 80” diagonal screen sizes. MSRPs are $2,099.99, $2,899.99, and $5,599.99, respectively.
These models also come with HEVC / VP9 streaming support and Revelation upscaling, and the press release states that “…Easy connectivity is at your fingertips in both the UH30 and UE30 series with four HDMI® inputs equipped with the latest 4K specs.” That would seem to indicate four HDMI 2.0 input ports, which may be more than any other manufacturer at present.
The top-line models (UH series) are the 70-inch LC-70UH30U ($3,299.99) and 80-inch LC-80UH30U ($6,299.99) and include all the bells and whistles of the UB and UE series TVs, plus something Sharp calls SPECTROS Rich Color Display. This is a color-enhanced image that also shows some signs of supporting high dynamic range (HDR) content, but it’s not using quantum dots. Nor is it firing additional adjacent sets of color pixels to improve saturation, something Sharp called “3K” at CES 2013.
There is a marked improvement in color quality from a conventional TV to one equipped with SPECTROS. And with Samsung, LG, Sony, and others showing quantum dot-equipped Ultra HDTVs, Sharp had to offer something to keep up with the Joneses.
All of the UE and UH-series TVs also support Android TV, unlike Samsung’s Tizen and LG’s Web OS. That means you have a search engine that is similar to Google on your smartphone or tablet in operation. We tried it out to locate programs as well as the score of the Yankees afternoon game, but weren’t as successful with other searches through the voice-activated remote.
There you have it. Sharp certainly has the know-how and supply chain to build and market the latest in TV technology, and their build quality has always stood up well to any other manufacturer. Given the rapid fall in TV prices, it might even be prudent for Sharp to abandon the 1080p TV market and toss all of their eggs into Ultra HD going forward, where I think they’d have a much easier time carving out a niche.
After all, it’s not like the company doesn’t have any experience with ultra-high resolution imaging. They’ve shown an 85-inch 8K TV for several years now at CES, and the NHK 8K broadcasts in Japan make extensive use of Sharp displays – all the way down to a 13-inch 8K OLED TV, shown at the NAB expo back in April.
Now, they just need to get some “buzz” going….
Attention, TV Buyers – Your Time Has Come!
- Published on Monday, 19 January 2015 11:36
- Pete Putman
- 0 Comments
You may not have noticed it, but the U.S. economy is doing quite well right now. Unemployment continues to fall; the Dow and S&P 500 recently hit all-time highs, and the price of oil has gone into free fall lately.
For many consumers, that means more money in their wallets. And with the conclusion of the college football playoffs and the Super Bowl looming in a couple of weeks, now – and I mean NOW – is the absolute best time to buy a new television.
Not on Black Friday, or Cyber Monday. Not right before Christmas. NOW.
It’s been well-documented that TV sales spike upward right as the pro football playoffs start and hit their peak the week before the Super Bowl. That’s partly because obsessed fans want a big-screen HD experience to see the Seahawks and Patriots slug it out. But it’s also because TV retailers see slow months looming immediately after the game, and don’t want to sit on large quantities of unsold inventory.
To drive the point home, brick-and-mortar store chains like Best Buy and HH Gregg are circulating fliers in the Sunday papers that showcase these big screens with generic football scenes. Gregg’s flier for this past Sunday (1/18) calls it their “Annual Super Sale.” Best Buy trumpets your chance to “Get a Game-Changer at a Great Price.”
So, just how good are the deals? BB’s flier features deals on LG sets, offering a 55-inch Ultra HD smart TV (55UB8200) for $1200 and a 65-inch model (65UB9200) for $2000. Don’t need 4K? You can grab a 55-inch 1080p set (55LB5550) for $500 or a 65-inch version (65LB5200) for $800. Pick up an LG soundbar for $200, a $100 discount off full retail.
Across the street, Gregg has an LG 60-inch Ultra HD set (60UB8200) for $1800 and a 49-inch (yes, 49-inch!) 49UB8200 for $900. Not big enough? Sharp’s 70-inch LC70LE660U 1080p TV is tagged at $1400, and Gregg will throw in a $50 gift card with it. LG’s also got a 79-inch Ultra HD model (79UB9800) for $6000 – not exactly a bargain, but that is a HUGE TV with 4K resolution.
Aside from the LG behemoth, these are Vizio-like prices. Speaking of Vizio, they’ve got a 55-inch 1080p set (E5501-B2) at Best Buy for $600 and a 50-inch loaded “smart” model (M5021-B1) for the same price. You’ll also find a 65-inch 1080p set (D6501-C3) for $900 and a 70-inch 1080p version (E7001-B3) for $1300. Vizio’s in the Ultra HD game, too – their 65-inch P652UI model is yours for just $1500.
How about Samsung? The 55-inch UN55HU6950 Ultra HD smart TV has been discounted to $1300 at Best Buy, while Gregg has the 65-inch UN65H6203 1080p smart TV for $1200. And if you need a basic 32-inch set for a bedroom or vacation home, the Samsung UN32EH4003 will set you back just $219. (Of course, you can also buy a ProScan PLDED3273A 720p 32-inch TV at Gregg for just $160.)
Let’s turn our attention away from specific models and prices and look at the big picture. Until last year, the biggest TV you could buy for less than $500 was around 42 inches. For less than $1,000, it was 60 inches. Now the bar has been lowered – you can routinely find 55-inch sets for $500 (Haier has a 55-inch model for $400), and 65-inch 1080p sets for $800 to $900.
And Ultra HD set prices, which flirted with the $1,000 level several times last year, are getting very close to those of 1080p sets. In some cases, loaded 3D “smart” 1080p sets sell for about the same price as basic Ultra HDTVs. Case in point: Samsung’s UN55HU8550 55-inch Ultra HD model (smart 3D) sells for only $200 more ($1700) than their 60-inch UN60H7150 (smart 3D) 1080p TV ($1500).
Aside from a spike in Ultra HDTV sales last year, there’s not a lot of motivation for consumers to upgrade their televisions unless they can score a real deal on a much bigger screen. 55 inches for $500 will do it; so will 65 inches for $800. And some will take the plunge into 4K as the price of 55-inch sets drops closer to a grand.
Best Buy hopes you’ll do this sooner than later: In a news story from January 15, the company’s financial guidance stated that domestic sales would be flat to negative for the first half of the year. At the same time, Best Buy also said profitability will take a hit as it plans to spend heavily on store improvements.
Expect further discounts as we get closer to the big game. You’ll probably see at least one or more 55-inch Ultra HD models dip below $1,000 in next Sunday’s fliers, and you might also see 65-inch 2K sets pushed for $700. There might even be more crazy discounts the day of the game as brick-and-mortar retailers try to push more black ink onto their ledgers.