Posts Tagged ‘Sharp’

Goodbye, 2012. Don’t Let the Door Hit You on the Way Out

This will be my last post for 2012. And what a year it’s been.

We were dazzled by 55-inch OLEDS at CES nearly a year ago that will not make it to market. We’ve seen record financial losses at some of the most venerated names in consumer electronics (Sony, Panasonic) and one long-time Japanese brand on the verge of bankruptcy (Sharp.)

TV sales continued their decline from last year, as did TV prices. It’s now possible to buy 42-inch LCD TVs for quite a bit less than $400. The obituary is being written for plasma, according to most analysts. (I agree.) Many LCD TV manufacturers and retail brands are now branching into (get this) LED lighting.

Viewing of traditional broadcast TV channels fell off the cliff this year, except at NBC. AMC is the hot channel now, and ironically,  they used to just run old movies with innumerable commercial interruptions. There is evidence that cord-cutting is gaining in popularity (it’s the economy, stupid!) and video streaming has supplanted sales and rentals of DVDs and Blu-ray discs. My gosh, Disney and Netflix are now partners in streaming!

The hot products this season aren’t TVs, although really big screens are dirt cheap and have seen a spike in sales. Digital cameras are threatened by smart phones, with 2012 shipments off by as much as 40% from last year. Now, we have DSLRs and point-and-shoots with built-in Web browsers, quickie image editors, and the Android OS. (I think that’s called a phone now?)

No, the hot product this year is the tablet. iPad, Surface, Nook, Galaxy, Kindle, take your pick – they’re all popular, and the Consumer Electronics Association predicts that 50% of American homes could own at least one tablet by the end of the holiday selling season.

Interest in 3D has largely waned among the general public and TV manufacturers, contrary to what you may read on some die-hard 3D enthusiast Web sites. From all accounts, the 3D Olympics broadcasts found their biggest audience in the production trucks adjacent to the events in London.

So what’s the next big thing? Why, it’s 4K, otherwise known as Ultra HD (except at Sony, who always marches to the beat of a different drum). Never mind that there’s no content to watch; you can buy in for a mealy twenty grand. Or, you can wait until after CES and pick up one of the new Chinese 4K TVs for a lot less.

Prices for flash memory are dirt cheap, further depressing optical disc sales. You can buy 32 GB SD and Micro SD cards for all of twenty bucks now. That’s enough space to hold almost six two-hour 1080p movies, using MPEG4 H.264 compression.

We’re seeing a major shift away from value in hardware to value in software – content, apps, whatever you want to call them. Face it; “electronics is cheap!” And more and more of our gadgets are coming from China, which is evolving into the largest market for consumer electronics in the world.

Front projectors came under heavy fire in the commercial AV space, threatened by super-cheap and big LCD TVs. But they’re firing back by adopting lamp-less projection engines, using LEDs, lasers, or combinations of the two. The rear-projection TV category is officially RIP now, after Mitsubishi threw in the towel in late November. If it ain’t flat, consumers don’t want it.

You know things are nutty when Samsung and Apple seem to spend most of their time in court suing each other (and Google, and vice-versa), yet all three companies paired up to make a $500M bid for Kodak’s digital imaging patents. You remember Kodak, right? They once made photographic film, and cameras, and processing chemicals, etc. (Don’t remember them? You must be a Millennial.)

The industry is obsessed with the “second screen,” although they can’t quite define how it is used and how often. We’re obsessed with the idea that we can stream any movie or TV show we want, at any time and in any place, but continue to be surprised when the monthly bill comes in from Verizon, AT&T, Comcast, Time Warner, and so on. And why is it that broadband speeds are so much faster abroad, in countries where the government often maintains the telecommunications infrastructure?

Despite claims that more airwaves are needed for wireless broadband (at the expense of UHF TV broadcasters), we found out the hard way during Hurricane Sandy and other extreme weather that, more often than not, broadcast TV was the only reliable way to get news updates when the power went out, trees fell down, and buildings flooded. (Some lessons are just hard to learn!)

It’s been quite a year, and Ken and I have enjoyed trying to explain the significance of many of the developments that you’ve heard and read about. We’ll continue to do so in 2013 on an all-new Web site (same name) that should be somewhat easier on the eyes and faster to navigate.

Look for a launch of the new site sometime in mid-January, right after that annual exercise in electronic insanity that takes place in Las Vegas every year. Both Ken and I will have our usual coverage and analysis, and maybe we can even find a couple of gems amongst all of the electronic detritus that lines the aisles of the Las Vegas Convention Center.

That’s it for now. Have a safe and happy holiday season and a safe New Year. And in the wake of the Newtown, CT tragedy, remember to keep all the gadgets we lust after and “can’t live without” in perspective: It’s just a bunch of dumb wires and components when all is said and done.

There are more important things in life…

4K Presto Change-O!

Sony is headed for an unprecedented ninth straight year of financial losses in its television business, but pay no attention to that – look at this nice shiny thing over here instead! Yesterday, Sony announced they would begin shipping the 4K Ultra HD Video Player, a hard disk drive (HDD) media player that connects to Sony’s XBR-84X900 84-inch 4K LCD TV. The player will be pre-loaded with several full-length movies and a gallery of 4K video, according to the company’s press release.

Interestingly, the release also stated that the player is “…Available as a bonus loaned exclusively to U.S. customers purchasing the Sony 4K LED TV…” Apparently, you can’t buy one; you can only “borrow” it. Let’s read a bit more from the press release:

“Sony is a company of firsts, and this introduction of the first 4K technology platform continues that pioneering, innovative spirit,” said Phil Molyneux, president and chief operating officer of Sony Electronics. “We were the first to introduce 4K projectors to cinemas in 2005, the first to introduce a 4K projector designed for the home in 2011, and the first to offer a 4K upscaling Blu-ray Disc player earlier this year. Now, we’re the first to begin closing the content loop, offering native 4K content for the home and delivering the most immersive, awe-inspiring entertainment experience yet.”

And just how “awe-inspiring” will that experience be? The 4K movie offerings include the recent remake of Total Recall, a movie that was universally panned by critics (30% rating on the Rotten Tomatoes Web site) and didn’t even make back half of its production budget.

You’ll also receive Adam Sandler’s That’s My Boy!; another box office bomb that scored even lower among critics and made a brief appearance in theaters. Want more? How about Battle: Los Angeles, of which one RT critic said, “…… this humorless film (is) as unimaginative — and as exhausting — as you can get.”

The 4K bundle also includes Salt, The Karate Kid (2010), The Amazing Spider-Man, The Other Guys, Taxi Driver, and The Bridge on the River Kwai. I enjoyed the first three Spider-Man movies, but skipped this year’s re-boot. The rest of the movies gathered decent reviews, but from my perspective, there are only two true classics on the list – Taxi Driver and River Kwai.

Sadly, they can’t even stock their media player with movies worthy of 4K transfers, like their recently-restored Dr. Strangelove, which looks gorgeous in 4K. (Hey Sony, how about offering some Academy Award nominees and winners instead, like The Last Emperor, or A Few Good Men? Moneyball? The Social Network? Remember those?)

Sharp is also practicing misdirection. Thursday’s business newswires were buzzing with rumors that Sharp is in talks to sell shares of the company to Dell, Intel, and Qualcomm to bolster its balance sheet in return for a stable supply of breakthrough display technology.

According to the Wall Street Journal, Sharp wants an investment of about $240M from both Dell and Intel, and a smaller investment from Qualcomm. The prize? Sharp’s IGZO (indium-gallium-zinc oxide) backplane technology, which makes displays lighter and thinner, increases pixel density, and improves energy efficiency. Any deal these companies would make with Sharp would guarantee them a corresponding percentage of the Sakai IGZO panel output.

Sharp’s negotiations with Hon Hai stalled a few months ago, and the latter company sees no point rushing to close a deal while Sharp’s market valuation is falling off a cliff. Ironically, Hon Hai’s reluctance is a contributory factor in Sharp’s share price dropping to bargain-basement numbers – trading last Friday for about 172 yen, a decline from well over 2,000 yen in 2008.

According to the WSJ story, Sharp President Takashi Okuda was quoted as saying that “Sharp is counting on IGZO to save the company.” However, Sharp’s struggles with low IGZO production yields are well-known, and the company’s cash reserves are rapidly dwindling.

It’s 4K or bust for Sharp!

So what do you say to the press?  Pay no attention to that; look at this shiny new thing over here instead! Sharp’s “shiny new thing” is a 32-inch 4K (3840×2160) LCD monitor that will go on sale in February for ¥450,000 in Japan (about $5,500 in USD). It uses the IGZO backplane, weighs about 17 pounds, and will include a pair of HDMI connectors and internal speakers, according to IDG’s News Service.

Note that this is not a 4K TV; just a ‘dumb’ monitor. But its price per diagonal inch is far below that of the 84-inch 4K TVs announced by Sony, LG, and Toshiba. Unfortunately, the screen size is too small to be of much value to the consumer market, which is why the company stated that they expect more interest from computer graphics professionals, the medical industry, and architects.

Both 4K announcements show that while both companies may be losing their shirts, they haven’t lost their technical mojo. Now, the question is how long before analysts, investors, and the press refocus on the elephant in the room: Profitability.

This article originally appeared on Display Central.

Red Ink at Morning; Investors Take Warning! – Pete Putman

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…

This article originally appeared on the Display Daily Web site on November 5, 2012.

Foxconn and Sharp to Launch 60-inch LCD-TV for $1000 – by Ken Werner

If you’ve been reading HDTVexpert.com or looking in at your favorite on-line or brick-and-mortar electronics retailer, you know that the very-large-screen segment – 55 inches or more – of the TV marketplace is hot. Prices are dropping rapidly and unit sales are growing fast. Furthermore, this is the only market segment in which both panel and set makers can make more than a hair’s breadth of profit.

Now, before we all get too excited, I should remind you that the 55-inch-and-over segment constitutes only 6 or 7 percent (in units) of the overall TV market, perhaps rising to 10% by 2015, according to DisplaySearch estimates. The 60-inch-and-over part of the market is perhaps 1% this year. Still, that’s the most profitable 1%, it accounts for over 2 million TV sets, and it’s growing.

Sharp, Foxconn, and Japanese Flags fly over Sharp facility in late August 2012, but the agreement for Foxconn to purchase a stake in Sharp was not finalized.

Now, what would happen to this segment if the panel maker that has the only

Sharp, Foxconn, and Japanese flags fly over Sharp facility in late August 2012, but the agreement for Hon Hai to purchase a stake in Sharp was not finalized.

Generation 10 LCD fab in the world – and is therefore uniquely equipped to make 60-inch panels less expensively than anybody else – were to collaborate with the world’s largest electronics contract manufacturer to make 60-inch LCD-TV sets? There is a good chance they could make them at a lower cost than anyone else, and dominate the market. Well, that is exactly what Hon Hai Precision Industry (Foxconn) of Taiwan and Sharp Electronics of Japan intend to do.

In early October, Jalen Chung and Francis Huang of Taiwan’s Central News Agency reported that Hon Hai may launch such a TV set as early as the end of October, with volume production beginning in early 2013, citing “market sources close to the company.” Hon Hai would not confirm an exact timetable for the official launch, but did say it could be imminent, and it confirmed that the LCD panels would come from Sharp’s Gen 10 plant in Sakai, 46.5% of which is owned by Terry Gou, Hon Hai’s Chairman.

Julian Ho and Alex Wolfgram of Digitimes added that the sets will be sold under the brand name SIO, quoting industry sources. Ho and Wolfgram also reported that the sets are likely to be priced at US $999 when they reach the North American market, but that may not happen for a while. CNA’s Chung and Huang reported that the initial sets, which will contain Internet TV functions, will first be sold in Taiwan and China before Foxconn promotes them on the global market.

Prior to the launch, Hon Hai intends to offer 60-inch TVs to hundreds of its employees at a special price of under NT $40,000 (US$1,365) per unit, which may be less than half the price set by other suppliers in the Taiwanese market.

Hon Hai and Sharp are still working to renegotiate the terms of an acquisition deal by which Hon Hai and some of its affiliates would buy nearly 10% of Sharp. In March, Hon Hai agreed to acquire the stake for ¥67 billion, or ¥550 per share. Since then, though, Sharp’s shares plummeted, reaching a low of ¥164 in mid-August. Hon Hai is understandably making use of a clause that permits it to renegotiation the terms of the acquisition. Sharp, in very deep financial trouble, has recently obtained financing that should, according to industry sources, give it time to finalize its agreement with Hon Hai.

But now, there are mutterings in the industry that the existing major TV players may not be able to compete with the Hon Hai-Sharp large-screen-TV behemoth, and that supply-chain participants will have to scramble to find places in a significantly restructured manufacturing environment . With that in mind, we can wonder what the new SIO brand stands for? Could it be “Sharp In Terry GOu’s pocket?”

Ken Werner is Principal of Nutmeg Consultants, specializing in the display industry, display manufacturing, and display technology.  You can reach him at kwerner@nutmegconsultants.com.

Ain’t No Cure for the Summertime (TV) Blues – Pete Putman

With the economy wobbling steadily towards a recovery and the digital TV transition well behind us, most consumers appear content to sit on their existing TVs, looking for a rock-bottom deal as an incentive to upgrade.

 

There are a host of reasons why TV sales remain sluggish. The most obvious is spiking interest in so-called ‘second screen’ TV viewing platforms, such as tablet computers, laptops, and mobile phones; all at the expense of conventional TV sets.

 

Another reason is the low rate of turnover on TVs purchased within the past 5 to 10 years. (Yes, I know people that are still using older Samsung, Sony, and Mitsubishi rear-projection TVs from the start of the last decade!) I’ve even run into a few folks lately that have massive flat-CRT TVs from 12+ years ago that are still humming along. ‘Yes,’ they want to replace them, but ‘no,’ they don’t have the cash right now.

 

You can’t fault TV manufacturers for trying. There was plenty of hoopla back in 2009 when 3D TVs made a splashy entrance. Today? 3D functionality is mostly an afterthought, and is built-in to more than half the models in any given line-up.

 

I’ll take a contrary position to many of my colleagues at Display Daily and state that 3D isn’t going to be a factor in driving TV sales for several years – that is, until a workable, quality glasses-free solution comes to market. And that will likely require 4K display glass to implement. Sales of 3D TVs have consistently been tepid in North America (stronger in China and Indonesia), and manufacturers aren’t talking much about them these days, as Chris Chinnock detailed in his CEDIA report last week.

 

What about demand for Internet-connected TVs? I figured Internet connectivity to be a big driver of future TV sales, but it looks like I guessed wrong – at least, in this part of the world.  A recent study by GfK Associates revealed that NeTVs were most popular in China, Brazil, and India, while the United States, Great Britain, and Germany lagged behind. GfK went so far as to say that viewers in the latter three countries “…are stuck in an ‘analog’ mindset, whereas viewers in emerging markets are more likely to exploit the digital capabilities of Connected TV.”

 

According to the GfK report, only 29% of United Kingdom and 29% of U.S. consumers indicated that they were specifically looking to buy an Internet-connected TV, as opposed to 61% of respondents in India and 64% in China.

 

There was a hidden “ah-ha!” in the GfK report, though. 67% of all respondents are definitely interested in some form of touch and/or gesture control in a television, and 43% want to control their TV with something other than a traditional remote control. Perhaps TV manufacturers need to focus more on improving the user interface to drive future sales?

 

One of the problems with NeTVS is the diverse and non-compatible operating systems and GUIs used by different manufacturers. At the recent IFA show in Berlin, LG Electronics and Philips announced they would join forces to develop a common NeTV platform for listening to music, watching Internet videos, and playing games on line.

 

Both companies are founding members of the Smart TV Alliance (http://www.smarttv-alliance.org/) and are actively soliciting additional members. Their goal is to develop one common platform for apps and the OS so that consumers feel comfortable working with any TV brand.

 

However, CE giants like Panasonic and Samsung are deeply invested in their own platforms, like VIERA Cast and Smart TV, and have shown no enthusiasm for working with competitors. “Alliances may be possible, but we’re not at that stage yet,” Hyun-suk Kim, the head of Samsung’s TV business, said in a Bloomberg story. “Everybody is using their own platform right now, but the small companies find it very difficult to get content and services. Having a unified platform would be very helpful for the industry but I’m not sure it’s the right time for Samsung.”

 

Could Google’s Android platform be the answer? The first version of Google TV was met with a large yawn, and the second roll-out isn’t faring any better, according to Bloomberg. Both Sony and LG have built-in Google TV GUIs in their TV products – a huge improvement over the clunky, slow first version. But to date, consumers aren’t buying it.

 

Perhaps the answer is content delivery. TV manufacturers have tried for years to incorporate some sort of content pipeline interface and advanced program guide, with limited success. At one time, LG even built hard drives into several of their plasma TVs for time-shifting, and the number of ‘boxes’ available for Internet streaming is seemingly endless.

 

Today, most popular video and movie streaming sites are directly accessible from ‘apps’ and built-in channel buttons on late-model TVs; the best-known being Netflix, Hulu, and YouTube, which together account for better than 70% of all Internet video traffic.

 

Harnessing content and selling it is what Apple is all about, and it’s long been rumored that they will launch a TV this fall. Not so fast! says another story on Bloomberg.com. According to the story, Apple has run into a brick wall with cable companies such as RCN and Comcast, along with major networks like CBS.

 

The reason? Cable and media companies are concerned that a better-designed Apple product will undermine their business model, and fear that Apple will create a better user interface. As a result, analysts are predicting that we will definitely not see an Apple-designed television this year. “If I’m a cable company, do I really want to let Apple into my house?” said Jason Hirschhorn, the former chief digital officer at MTV.

 

The last consideration is 4K, which for 99% of all consumers is simply a pipe dream – too expensive, no content (yet), and little perceived value. Yet, that didn’t stop Sony and JVC from both announcing 84-inch 4K LCD TVs at IFA and CEDIA. (And yes, they are plenty expensive!)

 

There are two problems with these announcements. First off, Sony hasn’t made a profit for the past 8 years in televisions, and in fact has lost a considerable amount of money, dragging the company’s stock price down. So why bother with a $20,000 TV product that will sell in miniscule amounts? Probably to be cutting-edge and trendy, a mindset that has driven Sony’s marketing and sales efforts for many years now.

 

Second, JVC is a very minor player in the TV business. As a small Japanese electronics manufacturer working under tight budgets, they can’t hope to have significant sales in televisions, and may have just brought this product out to make a splash. They do much better with their industry-favorite D-ILA LCoS home theater projectors, of which there is now a 4K version.

 

Throw in LG’s recent announcement that they won’t be able to ship a 55-inch OLED TV to market in Q4 after all, and you can hear a loud, collective sigh of despair and frustration rolling eastward across the Pacific Ocean. We’re less than three months from Black Friday, and no one has the answer(s) yet…

 

This article originally appeared on Display Central 9/10/12.

 

http://www.display-central.com/home-entertainment/aint-no-cure-for-the-summertime-tv-blues/