The two Japanese firms announced that they will team up to develop the organic light-emitting diode (OLED) panels, with a view to finding a way to churn them out for mass production.
OLED screens are seen as a way to revive the TV market which is choking itself to death with low LCD set prices – meaning that major players are operating at a loss.
Sony and Panasonic will now work towards mass production of panels and modules for TVs and large-sized displays by 2013, according to a statement released by Sony.
Both firms have been toiling to work out a cost effective process to building large size screens, with others such as Samsung and LG also scratching their heads on how to make a profit from the nascent technology.
Sony has already managed to knock out some 11 inch TV screens but these are a long way off the size customers have become used to. By teaming up with Panasonic it hopes to make use of its ‘all printing method’ of production to churn out cheaper OLED panel at larger sizes.
As DisplaySearch analyst Paul Gray pointed out to TechEye, the problem isn’t as simple as making screens bigger by scaling up. The real trouble is in finding a suitable technology that will work at large sizes, and without costing the earth.
Current OLED screens work well at small sizes, but would be prohibitively expensive at, say 55 inches.
55 inches is the size Samsung has claimed to be readying for its own OLED screens, having ‘unveiled’ products at various events such as CES.
But, with little in the way of real details about the product’s release – “price TBA, start date TBA, start country TBA, everything else TBA,” Gray points out – we are still far from having large sized screens actually on sale – despite the ongoing marketing hoo-hah.
“This is just like a bunch of boxers talking in the weigh in,” Gray said, speaking with TechEye. “There is so much PR puff around this, but there is little of substance to back it up.”
What is crucial for all concerned is that the move into OLED, which is largely a case of maneuvering for pole position at the moment, does not descend into the cut-me-own-throat price drops that has hurt the LCD business.
“Starting a new product category where you lose money from day one is not a long term business proposition – we have seen that before, everyone has tried that and it didn’t work,” Gray said.
He pointed out that such a situation has to be avoided in the OLED market, at all costs.
“Having Sony and Panasonic enter the OLED market when Samsung and LG are already there, you have that ghastly feeling of deja vu of hyper competition, and nobody making money,” he said.
According to Gray, OLED can be a profitable market, but those involved need to be canny about the way TVs are marketed, as prices are likely to stay high at least in the short term.
“It depends on strategy,” Gray said. “Making money tomorrow has been the strategy so far [in the LCD market].”
If vendors “go in with the strategy that ‘we will make money from day one, we will drag it out for as long as we can for a premium product with large margins’” then the all involved could succeed.
“The risk is that someone breaks ranks,” Gray said. “If you market it as a premium brand, as something unique and special, you can get away with it. but you have to sell it differently.”