Sony, Panasonic Talk about OLED TVs

Sony Corp and Panasonic Corp are in talks to develop the technology to mass produce next-generation OLED televisions, sources close to the matter said on Tuesday, but may already be running to catch up with South Korean rivals in a technology widely seen replacing current LCD TVs.

Samsung Electronics and LG Electronics plan to sell 55-inch OLED televisions, which are as slim as 4 millimetres and consume less power and offer sharper images than liquid crystal display sets, by the year-end, Said Reuters.

Sony pioneered the technology with the world’s first OLED TV in 2007, but halted production of the $2,000 screens three years later because of the global downturn. Sony still makes OLED screens costing as much as $26,000 for high-end customers.

Japanese firms that dominated the global TV market in the 1980s and 1990s have been battered by their aggressive Korean rivals, along with weak demand for the TVs they make and a stronger yen that makes their exports more expensive. Sony, Panasonic and Sharp Corp reported a combined net loss of more than $20 billion in the year to end-March.

Those Japanese woes coincide with a battle in the TV market between credit-card-thin organic light emitting diode (OLED) and ultra-high definition sets. Shipments of OLED TVs may grow to 2.1 million sets in 2015 from just 34,000 this year, according to research firm IHS Inc.

Mass producing affordable OLED TV screens – the technology is used on smaller smartphones and tablets – will be key to future growth, and already the Japanese may be late to the game.

“Overseas competitors have gotten a head start in this area and I feel like they’re stepping into this too late,” said Masayuki Otani, chief market analyst at Securities Japan. “There’s no question OLED TVs are going to be the mainstream. The issue is price and size of the displays.”

 “Japanese makers haven’t been able to produce OLED TVs that are as large as Samsung’s … I think there’s an element of Japanese pride to this – the fact that Panasonic and Sony will work together to produce OLEDs to beat their Asian rivals. But I do have serious doubts on whether they can catch up,” he said.

Shares in Sony, which makes Bravia TVs, and Panasonic, which sells TVs under the Viera brand, fell sharply on Tuesday – with Sony down as much as 3.3 percent and Panasonic off 4 percent – continuing a slide that has seen both drop to their lowest levels in more than three decades as investors doubt they have the strategy to turn around their loss-making TV businesses.

“Both Sony and Panasonic would not be successful if they were to develop and sell OLED televisions alone. They have no choice but to find a partner,” said Makoto Kikuchi, chief executive officer at Myojo Asset Management. “It (tie-up) is a plus, but their earnings wouldn’t be rosy in the short-term because of this.”