Building Better Flatpanel TVs

As flatpanel TV prices continue to plummet, TV makers are searching for new strategies to build value into the low-margin category. 6/04/2007 8:00 AM Eastern

Building Better Flatpanel TVs

Jun 4, 2007 12:00 PM

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As flatpanel TV prices continue to plummet, TV makers are searching for new strategies to build value into the low-margin category.

After dangling OLED (organic light-emitting diode) in front of journalists during CES and its 2007 line show in February, Sony announced plans to bring an 11in. model out this fall in what could be a transition to a more profitable flatpanel technology. OLED promises higher contrast and better color saturation over LCD in a thinner form factor that doesn’t require a backlight, although it’s too early to tell whether the company can achieve the necessary manufacturing efficiencies to compete with other flatpanel technologies.

At the other end of the spectrum, Hitachi and Panasonic parent company Matsushita announced plans in May to supply each other with 85in. and 103in. plasma displays. Under the terms of the deal, Panasonic will provide Hitachi 103in. plasma panels this year, and Hitachi will supply Panasonic with 85in. plasma panels in 2008.

Other TV makers are putting on the glitz. In a recent article, Forbes noted that the LG Electronics 71in. plasma, which listed for $70,000 in early 2006, took a freefall to its current $15,000 price. But the company added a little bling to bring in the luxury crowd. A 24-karat gold version of the 71in. goes for $80,000.

Plasma panel shipments were down for the first time in first-quarter 2006, due largely to an increase in market share for LCD, according to market research firm DisplaySearch. Larger screen sizes should provide an uptick in plasma sales later in the year.

According to a Dealerscope Today report coming out of the Society for Information Display 2007 International Symposium, Seminar, and Exhibition held in Long Beach, Calif., in late May, the rapid growth of LCD technology will slow down as consumer demand is fed. “LCD TV has had such a rapid growth rate in the TV market and penetrated so successfully that it will be harder to generate revenue growth going forward,” says Paul Semenza, VP of display research at market research firm iSuppli. Semenza said LCD TVs will represent 65 percent of all TV displays in 2011, a bump of 11 percent over 2006.

Larger screen sizes hold opportunity but Semenza says risks remain for chasing the larger-screen LCD market. According to the report, Semenza says the LCD TV market has grown by migrating users to larger screen sizes. But, he says, “What’s the maximum size of TV that a significant segment of consumers will want?" Semenza says that moving to larger screen sizes has been successful so far for LCD suppliers, but that "this strategy could generate challenges going forward."

Meanwhile, Toshiba and Canon each scrapped plans for a fourth-quarter launch of SED (Surface-Conduction Electron-Emitter Display) TVs, which the companies hoped would bring CRT quality to the flatpanel space—along with more attractive margins. Canon cited precipitous price declines in the flatpanel market as the culprit and said more efficient production techniques would have to be designed and implemented in order to make SED competitive in the market. Neither company refreshed the timetable for launching SED TVs. Toshiba held behind-the-scenes demos of SED for journalists last fall at the CEATEC tradeshow in Japan and claimed the technology offered better contrast, black level, and color saturation levels than other flatpanel designs.

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