Posts Tagged ‘Sony’

Life (and Death) Go On In The Projector World

Three news items in the past few days are all focused on front projectors (pardon the pun). And each of these news items has a decided air of uncertainty around it, which of course reflects the sluggish economy and a looming paradigm shift away from projected images to self-contained, larger-than-life display technologies.

 

The first item is courtesy of Engadget, who reports that Sony is getting ready to bring a $28,000 4K-resolution projector to the home cinema market. They won’t be the first (Meridian previously offered the JVC 4K D-ILA platform for about $200K), but they will be the cheapest.

 

This announcement, which will no doubt be one of Sony’s big PR blasts at CES 2012, raises a few questions. First, who needs 4K resolution? That represents four times the detail on a full 1920×1080 image, and there isn’t any content available to consumers (yet) that is authored at that resolution.

 

Sure, HDMI v1.4 supports 4K. And you could certainly master a 4K Blu-ray disc, although at current disc capacities, you’d be limited to about 30 – 45 minutes of content with aggressive MPEG4 compression. But for now, 2K (or, more accurately, 2,073,600) pixels represents the upper limit for home viewing.

 

That gives rise to the second question: How will Sony scale 2K content to fit the 4K imaging devices, which are almost certain to be SXRD LCoS chips? It’s not just a line-doubling job. No, scaling 2K to 4K is akin to scaling standard definition video to the 720p HDTV format. And what will 720p broadcasts look like on this projector?

 

Third, how big a screen would you need to actually see the difference between 4K and 2K source material? I’m thinking that the typical 92-inch 16:9 screen at 12 feet isn’t going to cut it.

 

The second news item comes from Quixel Research, who reports that USA sales of 3D projectors for home use increased by 121% between Q2 and Q3 of 2011. That number represents 16% of all home theater projector sales, which sounds pretty impressive.

 

Ahh, but the devil is in the details, as usual. Sales revenue for 3D home projectors grew by only 14% in the same time period, a trend Quixel attributes to a “recent onslaught of low-cost 3D models” in the channel. Not so impressive, and even less so when you learn that the overall home theater projector market saw a 7% decrease in volume from Q2 to Q3 2011, even though the category saw a 2% increase year-to-year.

 

The culprit? Look no further than plummeting prices on bigger and bigger TV screens. For less than $3,000, you can buy a Sharp Aquos 70-inch LED LCD TV with all the trimmings. And their newest model measures 80 inches diagonally, and will retail for less than $5,000. Who needs a projector when you’ve got a self-contained TV screen that large? (Betcha Sharp shows a 90-inch+ LCD TV at CES!)

 

My belief is that 3D front projection make a whole lot more sense at home than small 3D TVs (less than 55 inches). Most people sit too far away from 3D TVs to get the full effect, and they rarely pay attention to controlling ambient light spilling on the screen.

 

But 3D front projection turns that equation around. It’s easy to get a big 3D image and not spend a ton of money to do it, and screens tend to be placed in rooms where lights can be lowered or shut off altogether, just like in a movie theater.

 

The problem is that projector manufacturers have slashed prices too low, too quickly. Got $2,000 in your pocket? You have quite a selection of stereoscopic DLP and 3LCD front projectors to choose from; of which a few models are tagged around $1,500. That’s a lot less than a 70-inch LED LCD TV costs – for now. But margins are very thin on such products.

 

The last item comes by way of AV Interactive, the top pro AV publication in the United Kingdom. According to their Web site, Sanyo will cease to exist as a brand name by the end of the 1st quarter of 2012 (also the end of the fiscal year for Japanese companies).

 

How the AVI staff found this out is interesting: They got hold of a letter circulated by Panasonic to ‘business partners’ informing them of the decision. (I assume ‘business partners’ means dealers and distributors.)

 

Readers from the pro AV industry will of course recognize Sanyo as one of the top projector brands, fronting an amazingly-large lineup that ranges from ultraportables to 10,000-lumens behemoths for auditoriums and theaters. They’ve also done pioneering work with short-throw projection as well as LED-powered light engines.

 

For those readers who missed the headlines, Panasonic acquired Sanyo in December of 2008 for about $4.6 billon, primarily to scoop up the latter’s industry-leading battery and renewable energy technologies. Solar cell technologies were also in the mix. I found out about the acquisition while having dinner with several Sanyo executives in Osaka that night, which of course made for some very interesting conversations.

 

At the time, I assumed that the Sanyo and Panasonic projector business units could co-exist nicely. Panasonic does very well in high-brightness DLP projectors, while Sanyo projectors are ubiquitous in hotels, classrooms, conference rooms, and even home theaters. But it appears that’s not going to be the case, as Panasonic will instead pull a ‘borg’ move and completely assimilate its prized acquisition.

 

Ironically, the two companies have family ties that go all the way back to the period just after World War II. Sanyo was born when Toshio Iue, a former Matsushita employee and the brother-in-law of Konosuke Matsushita (the founder of Panasonic), began manufacturing bicycle generator lamps in an unused Matsushita plant in 1947.

 

What will happen to all of the Sanyo and Panasonic projector business unit employees is uncertain at this writing; although it’s likely there will be substantial staff reductions. No word yet on whether Panasonic will continue to offer Sanyo-designed appliances (possibly), LCD TVs (unlikely), and cameras and camcorders (also unlikely).

 

What we will see from Panasonic is a wider portfolio of rechargeable batteries and energy-efficient devices. That may be the only legacy of Sanyo to survive after April 1 of next year. Too bad, because I love my Sanyo Xacti 1080p pistol camera and my brother loves his Sanyo 32-inch LCD TV. And I’m sure many readers love their PLV-series Sanyo home theater projectors, too.

 

Tempus fugit…

Ho-Ho-Ho! Is Turning Into Uh-Oh-Oh!

The results are in, and they aren’t pretty.

 

Both Sony and Panasonic posted substantial losses for the current fiscal quarter and are looking at lots of red ink next March, when their current fiscal year ends. Sony forecast a $2.2 billion loss for its TV operations in the fiscal year that ends next March. Overall, the company is looking at a $1.1 billion net loss for the current financial year, which reverses an earlier prediction of a $730 million profit.

 

This is Sony’s eighth straight year of losses for its flagship TV lines and rumors are flying that its S-LCD partnership with Samsung may be deep-sixed. Earlier, Sony announced it would split its television business into three divisions, consisting of (a) outsourcing, (b) the current LCD TV business, and (c) next-generation TVs (read: OLEDs), starting November 1.

 

But that may not be enough to stem the tide. Some prominent Asian market analysts think Sony should bite the bullet and just pull the plug on TVs altogether, concentrating on their gaming console, smart phone, VAIO computer, and camcorder operations.

 

The easier path to income may be for Sony to license its name to a Chinese TV manufacturer and collect royalties, much the same as Philips has done with Funai in North America.

 

Panasonic is looking at as much as $5.4 billion in losses by year’s end. The culprits are the high value of the yen against the dollar and euro, and the merger and re-sizing of the combined Sanyo – Panasonic operations.

 

Two TV manufacturing plants in Japan will be taken offline, while plasma TV production capacity will be cut by 48%. Further procurement will move to Singapore from Osaka, and plans to relocate plasma fabs to mainland China will also be put into limbo. The company expects to cut its payroll to 350,000 employees worldwide.

 

What does all of this mean to you? Expect to see deep discounts on TVs starting around Black Friday. There will be some amazing deals on large (55 inch and up) LCD and plasma TVs. Even the 3D products are going to come down in price, continuing a trend of diminishing premiums for 3D functionality.

 

So if you are in the market for a new LCD or plasma TV, this could be the perfect year to upgrade. Watch your online price trackers and be ready to move when you see a good price. Right now, you can find ‘basic’ LCD and plasma TVs for about $10-$12 per diagonal inch, up to 55 inches – use that as a baseline when you are wheeling and dealing. Who knows? You may do even better!

Hey, This Is Really Hard!

A story in the October 27 edition of the Wall Street Journal states that television may no longer be the ‘king of the hill’ when it comes to watching programming.

 

Food for thought: Apple’s high-end 10.1” iPad costs more than a 42-inch LCD or plasma TV (even a 42-inch LED-backlit LCD TV). And based on a presentation in my Display Technologies session at the just-concluded SMPTE Fall Technology Conference, more and more sales of ‘displays’ are going to switch to smaller, portable devices like the iPad, and away from conventional TVs.

 

Neither Internet-connected TVs nor 3D have helped revive TV sales, which slowed considerably after the 2008 recession. According to DisplaySearch, more than half of all new TVs shipped by 2015 will have Internet connections, just as more and more TVs will include 3D as a feature and not a premium upgrade.

 

The WSJ article quotes TV industry executives as speculating Apple, Google, and Amazon might enter the TV arena with products of their own. Apple’s TV prototype is already circulating through factories in China, according to several published reports. And Amazon already has experience in mass distribution of content over its Kindle platform.

 

Profits are hard to come by in the TV business. Three of the top four Japanese TV manufacturers said they lost money on TV operations during Q2 ’11, with Sharp being the exception – although Sharp’s LCD fabrication business was its biggest loss leader in the same time period. I have previously documented Sharp’s rapidly-diminishing market share in U.S. TV sales, which has been accompanied by a worldwide decline to about 8% of the market for the latest reporting period.

 

Over in Korea, similar red ink was seen at Samsung and LG’s LCD fabs, according to the article. In contrast, the TV marketing and sales operations were profitable. The challenge that all manufacturers face is continually declining values even with larger and larger shipment volumes, and the fear that TVs will soon fall into the low-priced commodity trap of computer monitors.

 

Sony’s continuing struggle to make a profit in LCD TVs for the past eight years shows that even a strong brand can’t carry the day anymore. The real threat is between smaller, portable wireless tablets that can do an amazing job with video playback.

 

On my flight home last night from SMPTE, I counted two dozen iPads in use playing back cached video or DVDs, plus numerous notebook computers. Each and every one of those products is now climbing the hill, ready to topple the king…

Wishing Won’t Make It So

These Elite sets may look great, but you can't get by on looks anymore in the TV game.

Last Thursday in New York City, Pioneer and Sharp took the wraps off a new line of high-end LCD TVs that will carry the familiar Elite brand. These products are intended to fill a hole in the high-end television retail channel; one that was created when Pioneer pulled the plug on their Kuro plasma sets a couple of years ago.

 

For readers who didn’t know, Sharp owns a 14% stake in Pioneer, and the two companies have collaborated on products in the past. You may not remember, but Sharp once carried 42-inch and 50-inch Pioneer plasma TVs in their line. That was back in the day when large LCD panels were difficult to manufacture and very expensive.

 

It’s instructive here to remember why Pioneer pulled out of the plasma TV business. First off, Pioneer had the smallest fabrication capacity of any of the big plasma brands, cranking out a fraction of the monthly yields of Panasonic and Samsung.

 

Second, Pioneer made the mistake of continuing to focus only on high-end retail channels for their plasma TVs long after it was clear that the plasma market was being commoditized. Panasonic’s best plasma TV sets were widely available through numerous brick-and-mortar stores for much lower prices and offered comparable performance to Pioneer’s offerings.

 

Even the vaunted Kuro sets couldn’t compete. Sure, they had super-deep black levels. But the additional first surface polarizers used to pull off that trick also dropped brightness levels to the point where the Kuro sets had to be viewed in dark or near-dark rooms. Panasonic, Samsung, and LG suffered from no such limitations.

 

In the end, the math is what did Pioneer in. You can’t make money these days selling a mass-produced flat screen display product in limited quantities at a price premium. It simply will not work. That is one reason why Hitachi exited the plasma TV business and ultimately the LCD TV business in the United States.

 

It appears that Pioneer didn’t learn that lesson. Neither did Sharp, who has a seen a precipitous drop in LCD TV market share since 2006. The Aquos brand, which once commanded better than 20% of the U.S. TV market, now struggles to hold onto 3% of it. Even the new Quattron four-color LCD TVs have met largely with yawns, and it doesn’t help that TVs are a tough sell in general these days. (Notice how even market giant Vizio has been pushing tablets and phones lately?)

 

According to a story in TWICE, the motivation for the new Elite LCD TVs came from Cedia dealers who said there was a definite hole in the market after the Kuro sets were discontinued and Runco shut down its Vidikron brand. (Runco/Planar’s misadventures in the home theater channel are another story altogether.)

 

Hence, Sharp and Pioneer created an Elite sales and marketing channel, with Sharp providing the TVs and Pioneer supplying Blu-ray players and AV receivers. The Elite TVs will be sold exclusively in North America, limited at first to about 750 dealers with the possibility of expansion into a larger base.

 

Elite dealers can either order TVs directly from Sharp or through a one-step distribution process. That last sentence should give pause; moving products to distribution guarantees that prices will drop over time and more retail outlets will be found to increase the volume of sales, thereby removing the ‘elite’ part of the equation. That’s what distributors do, unless they’re not serious about making money.

 

If this is such a good idea, why haven’t Sony and Samsung taken a similar approach? Sony’s woes with TV profitability are well-documented, while Samsung (and LG, and even Panasonic) recognized that mass-produced products can’t be sold in onesies and twosies for very long. But with Sharp’s inability to reverse its six-year slide in TV market share and Pioneer’s apparent jonesing to get back into the TV business, it appears both companies will give any idea a try these days.

 

For the record, the two Elite models that were launched were the 60-inch PRO-60X5FD, shipping this week for $5,999, and the 70-inch PRO-70X5FD, shipping later this month for $8,499. Those same screen sizes in the Aquos LCD TV line can be had for about $3,300 and $4,800, respectively.

 

The usual hype accompanied the press event, with Pioneer claiming these sets have the best black levels in the LCD TV business (that’s not saying much) and no competitors can come close. Sound familiar?

 

Here’s something else to think about. According to HIS iSuppli research, the “sweet spot” for U.S. TV sales is in the range of 40 to 49 inches. In the first quarter of 2011, that bracket accounted for 40% of all TV sales. The #2 position was occupied by the 30 – 39 inch group with 25% of all TV sales. In short. these two categories combined accounted for two out of every three TVs sold in this country from January through March.

 

Screens measuring 50 inches and larger represented 23% of all TV sales in that same time period. Although iSuppli didn’t drill down, I’d bet that 60 to 70 percent of the TVs sold within that category measured between 50 and 55 inches. That doesn’t leave a lot of market share to play with, if you want to sell 60-inch and larger screens.

 

The question here – as was the case with the Kuro plasma TVs – is how many units would have to be sold to turn a profit, and how many units the pro AV and Cedia channels could absorb at the listed prices. I would suspect that the answers are (a) a lot more than Sharp and Pioneer think, and (b) a lot less than Sharp and Pioneer think.Again, it’s all about the numbers these days – competitive prices and volume of sales.

 

Sharp has additional pressure on it to perform, given that it built the world’s only Gen 10 LCD fab a couple of years ago in Sakai, Japan. Sony was supposed to hold a 34% stake in the fab, but has capped its investment below 10% and is instead looking to China for lower-cost LCD TV panels. What will Sharp do with all of that capacity? And the fact that their finished panels are too expensive when compared to Korean and Chinese glass?

 

You can’t exist on high-end TV sales alone. Mitsubishi was the latest company to figure this out and underwent a massive re-organization this past spring to try and salvage what’s left of their rear-projection TV operations. Sony has lost so much money in the television business that it may have to walk away from manufacturing altogether and just private-label Chinese-made products in the future.

 

Wishing won’t make it so.

Sony: “Make. Believe” Isn’t Making It Anymore

An August 2nd Reuters news story said that Sony is preparing to overhaul its LCD television business to reduce costs and attempt to remain competitive against the likes of Samsung and LG. That means selling off TV factories to Chinese companies such as Foxconn Technology (manufacturers of the iPad) and moving more and more to a Vizio-style rebranding model.

 

Sony’s TV business has lost money for eight consecutive years, which about as long as Sony has been selling Bravia LCD TVs. The company cut its sales forecast for the current fiscal year by 19% to 22 million units, and now there is talk among analysts of the possibility that Sony might exit the TV business altogether – something that is almost inconceivable, given Sony’s long involvement with television.

Three words: Wake. Up. Call.

But the facts are hard to argue with. Ever since Sir Howard Stringer took over at the helm six years ago, Sony Corporation has lost 50% of its market value. According to the Reuters story, Sony is currently valued at just $25 billion, less than 25% of the market valuation of Samsung.

 

Over the years, pursuing profitability in the TV business has led Sony to form an alliance with Samsung (S-LCD), announce plans to take a 34% investment stake in Sharp’s Gen 10 LCD fab (later pruned back to less than 10%), and search high and wide throughout Taiwan and Hong Kong to find a competitive source for the smaller LCD panel TV sizes that still dominate the market.

 

Sony’s initial TV strategy was to position themselves as an Apple-like brand, getting people to pony up a premium for a perceived advantage in Sony product quality and engineering smarts. Trouble was; it was all too easy to surf the Internet and discover that smaller Sony LCD TVs were being sourced from many of the same manufacturers as 2nd-tier LCD TV brands.

 

Sony’s “own the manufacturing chain” business model was blown out of the water by Vizio, the ultimate OEM TV partner, who spent millions of dollars in advertising and went for the jugular with aggressive pricing in wholesale clubs and discount outlets. And of course, Samsung is responsible for much of Sony’s misery, given how aggressively the Korean TV giant followed its ten-year blueprint to become “the next Sony.”

 

It doesn’t help that 3D and Google TV have done little to stem the losses. 3D TV is still struggling to gain widespread acceptance and will likely become just another option built-in to all future TVs; one that cannot command a premium.

 

Google TV is even more of a bust. If you’ve ever had a chance to use the remote control for Sony Internet TVs, you’ll know why: It’s complicated and intimidating to use. People like the idea of watching Internet-delivered video, but they don’t want to search for it with a computer-like interface.

Seriously - Who thought THIS was a good way to watch TV?

To make matters worse, the Sony name doesn’t command respect like it used to.  Interbrands’ annual survey of global brands places Samsung 15 places above Sony. That is mind-boggling, given the strong brand equity Sony used to have.

 

The Reuters story states that Sony could lose close to a billion dollars this year in its TV operations, and that would push total losses to almost $5 billion since 2004. So the question is – how long will Sony continue to spill red ink?

 

One obvious solution to the problem is for Sony to wash its hands of TV manufacturing completely and instead license the Sony name to a line of OEM TVs, much like Kodak is doing these days with digital cameras and photo frames.

 

There is a precedent: Earlier this year, CE manufacturing giant Philips threw in the towel on its TV business, citing increasing losses and an inability to remain competitive even on its home turf in Europe. Going forward, Philips has licensed its brand to Funai for all future Philips LCD TV manufacturing.

 

By following this model, Sony could finally achieve profitability in the TV game. Ironic, isn’t it?