Sony-Samsung Battle Gets Fiercer in Flat-Screen Industry

The competition for supremacy in the global flat-screen industry is expected to get fiercer as Japan's Sony, which has failed to enjoy profits from its Bravia LCD TVs, is now trying to compete with Samsung Electronics in 3D TVs. Although analysts and industry watchers are still doubtful due to the low amount of 3D TV-only content, they say the Tokyo-based company's new focus seems enough to threaten Samsung, considering Sony's strength in content-based software businesses.

"Quite a few years would be needed for Sony to reap profits on the level the company hopes from its new focuses. But the key point is that Sony has the edge in home entertainment content," Park Hyun, an analyst at Prudential Investment, a local brokerage, said Monday.

Officials at Samsung Electronics said the world's biggest maker of LCD TVs is planning to make efforts to accelerate its sales of "converged LCD TVs with LED backlights" in the global market for the whole of next year. The upgraded flat-screen television sets make it possible to realize 3D figures on screen, and guarantee a greater accessibility to Internet-linked wireless content.

As industry latecomers to the LED TV business, such as Dutch-based Philips, and Toshiba and Sharp of Japan, are ready to commercialize LED TVs in 2010, Samsung is planning to add functions such as 3D effect to upcoming models to sustain its industry leadership, officials say.

"The market for 3D televisions will grow at a faster pace earlier than expected as Sony has clarified its intention for the segment," according to the analyst.

3D TV: Sony's Savior?
Sony Chairman Howard Stringer is confident that the Japanese company will finally reap the benefits of being a company whose businesses span video games, gadgets, music and movies. The company has often pointed to its ownership of content as an advantage over competitors but, so far, the benefits have proved to be illusory.

The TV titan failed to narrow the market gap with Samsung Electronics in the global TV industry as the strengthening yen and a management reshuffle distracted the company from joining the LED TV race. Sony relinquished the top spot to Samsung in 2006. Since then, its TV business has been stalling. For example, Samsung is now holding some 80 percent of the global market for LCD TVs with LED backlights. But Sony is just preparing to jump into the market.

"Just like LED TVs for Samsung, 3D TVs could be the new segment for Sony to eventually crack into Samsung's leadership," Park of Prudential said.

Sony CEO Stringer said the company hopes to regain its competitive edge in the global television market with the launch of three-dimensional TVs and expansion of its online services. 3D TVs allow viewers to perceive an illusion of depth on screen when they wear special glasses. Sony has said it expects one-third to a half of Sony TVs to be packed with 3-D features in three years time.

"While others, including Disney and DreamWorks, are aggressively bolstering their 3D production, Sony is also supplying animation and other content through Imageworks, and we confirmed that a company having its own content is a big strength," Morgan Stanley, a U.S.-based brokerage house, wrote in a memo to clients.

"The number of 3D movie screens has been on the rise globally, from 2,500 in 2008 to over-7,000 in 2009, and to 15,000 screens by 2013," it said, adding that Sony expects a full launch of 3D broadcasting in 2011, driven by sports programming.

Content Problem
Although analysts generally have no big questions over the long-term market outlook for 3D TVs and Sony's capability to produce 3D content, content is still cited as the biggest concern.

"What is limiting 3D is the lack of content. I think it's something that will become desirable over the next few years," a top-ranking industry official said.

"Despite all the advances, content is still important. You can have all the best technology in the world but if you don't have content people want to watch, they're not going to switch on," according to the official.

Sony plans to record up to 25 World Cup games in 3D via an agreement with FIFA, an international football governing body.

"But that's just for a one-time. I can say it's a show-off," the official added.

Sony Chairman Stringer said it would step up efforts to add 3D-related functions to Blu-ray players. But some say Blu-ray itself has done little to perk up the flagging consumer video businesses, whose revenue has traveled on a slight downward curve over the past few years.

Another question is how to ensure that 3-D scenes are shot to seem realistic. Filmgoers are comfortable with the "fantasy world" depicted in 3-D animation.

"Will consumers be asked to wear (the glasses) all the time? Most people today watch TV while doing something else," another industry official said, adding cost is another consideration.

"Vendors haven't yet disclosed pricing for 3-D Blu-ray players or TVs. But in a weak economy, another high-ticket gadget might hold limited appeal," he said.

At a time when Sony is expanding its aggressive footsteps to capitalize on such next-generation TVs and strengths in content-related services, Samsung plans to increase its sale of LED TVs by four-fold to 10 million units in 2010 from an estimated 2.5 million by the end of this year, Samsung officials say.

By Kim Yoo-chul, The Korea Times