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TV makers bet big on 3D but payoff uncertain

Las Vegas, January 7, 2010

Television manufacturers are banking on 3D TVs for their next sales boost, with sets capable of adding that extra visual dimension expected to hit US store shelves in force by the middle of 2010.

Top TV makers including Sony, Panasonic, LG and Samsung will feature 3D screen advances at the Consumer Electronics Show this week, hoping the new technology will be as big a boost for the industry as the transition to color TVs from black and white.

But investors think it is still too early to put money on 3D. It took a decade for the cost of color TVs to fall enough to win acceptance in the US, noted Mitsushige Akino, chief fund manager at Japan's Ichiyoshi Investment Management.

"TV makers want more for 3D than they can get," he said.

"Plus, neither Samsung, Sony, Panasonic or LG has gained the technological advantage. Until that outcome becomes clear, I'm not investing," he said.

Many consumers have only just unboxed new high-definition television screens, making them unwilling to spend on upgrading again any time soon, analysts said.

There are only a few 3D TVs in the market today, with a 42-inch set selling for about $1,000 and a 50-inch set selling for more than $2,000. A 42-inch HD LCD TV costs about $600-700.

The need for special 3D glasses and the lack of live sports and entertainment events in 3D may keep people from adopting the technology outside the cinema, analysts said.

While Walt Disney Co's ESPN and Discovery Communications Inc both announced plans for 3D programming, analysts say most 3D video will come from disc since TV networks have acquired little of the infrastructure needed to broadcast in 3D.

"A major impediment -- beyond making sure everybody has glasses -- is making sure there is something interesting to watch," added Paul Gagnon, director of North American TV research at DisplaySearch. "It's not going to have the breadth of content that high definition has right now. It will take years to build that up.”

Gagnon estimates some 1 million 3D television sets will ship worldwide in 2010, a sliver of a total TV market that is expected to top 200 million units.

DisplaySearch sees a total of 9 million units of 3D TVs shipped in 2012

Big bet

3D is a big bet for a television industry looking for the next big thing after millions of households over the past five years bought flat-screen TVs for the living room, bedroom, and even kitchen and bathroom.

LCD TV sales are still strong, but profits are shrinking fast as prices for the TVs drop. DisplaySearch projects LCD TV revenues to decline about 6 percent in 2009 due to discounting and the rise of discount retail channels, such as Wal-Mart Stores Inc, as TV suppliers.

A tight supply of panels is also causing an extra drag on money-losing Sony while denting profits at Samsung and LG's TV operations.

Yesterday (January 6) in Las Vegas, TV makers lined up to tout their latest 3D projects and products.

As a maker of TVs, blu-ray video players and the PlayStation 3 game console, Sony could show at CES the ways that the Japanese conglomerate's many arms can join around 3D.

Sony introduced its first high-definition 3D TVs -- 38 models ranging from 22-inch to giant 60-inch models with Wi-Fi for connecting to broadband home networks.

But even Sony chief executive Howard Stringer was unclear on when 3D TV would hit its stride.

"We do have 3D cameras, and 3D video games, 3D content and Imageworks that does 3D for other studios. So we have a lot of different disparate assets, lots of beads on the necklace," Stringer told Reuters in December.

"The question is: 'Is the necklace going to add up to something concrete and profitable?'" he added. "We won't know for a little while."

Samsung on Wednesday said it would develop thinner, more power-efficient light-emitting diode (LED) 3D TVs to boost its existing line-up.

Toshiba unveiled its ZX900 series CELL TV, which promises to convert two-dimensional images into 3D in real time, so users can watch everything from sports to video games and previously recorded shows in 3D.

The Cell system boasts 143 times the processing power available in current TV models and still requires users to wear glasses to watch images in 3D.

Toshiba's Cell TV, which is expected to hit US stores in the fall, is likely to retail at a price close to the $10,000 it sells for in Japan.

Panasonic, the biggest maker of plasma TVs, is especially hungry for a slice of the 3D pie, hoping that the lower cost of adapting plasma TVs to 3D would yield higher margins.
The company announced a tie-up with top US satellite provider DirecTV to launch three high-definition 3D TV channels by June to try and jumpstart demand for 3D TVs and content.

But before seeking a savior in 3D, TV makers need to cut costs and fight to win in emerging economies, if they are to compete at all, Akino and other investors said. – TradeArabia News Service




Tags: Toshiba | Las Vegas | Consumer Electronics Show | 3D TV | Cell TV |

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