Matsushita’s $2.7 billion plan to acquire Hitachi’s flat-panel TV business—with the expected accompanying shift from plasma to liquid crystal display preference—alone could have tipped the balance in the big-screen display battle. Then a few days later Toshiba upped the LCD stakes when it revealed that it will use Sharp as its primary technology supplier and in the process drop out of an alliance with Matsushita.
As these deals unfolded a fortnight before the Consumer Electronics Show, they set the stage for a massive rearrangement of the flat-panel retail scene. Coming during the ramp up to the digital TV transition in the United States, Asia and Europe, the LCD juggernaut could overhaul distribution and pricing in the video monitor sector. But it may just be an interim step as even newer technologies—such as Interferometric Modulator (IMOD) displays—wend their way to market, albeit initially for somewhat different visual applications.
(click thumbnail)Sony launched its 11-inch XEL-1 OLED model HDTV at CES 2008.The U.S. retail market is already heavily skewed toward LCDs, which represented about 77 percent of flat-panel TV set sales (by units) during 2007, versus about 23 percent for plasma monitors. That skew in part reflects the lower prices (and smaller sizes) of LCD displays.
Matsushita, one of the bulwarks of the plasma bastion, has been tiptoeing into the LCD category for a while. But it has maintained its plasma preference, insisting that plasma is cost competitive for sets larger than 40 inches. The Hitachi deal puts that staunch belief into question.
Accompanied by Toshiba’s alliance with Sharp—a further endorsement of LCD’s ascending dominance—the Matsushita-Hitachi relationship set the stage for a dynamic display smackdown during CES. Looked at another way, however, this confrontation is just another brief skirmish in the longer-term battle for a better screen.
Indeed, a third party in the Matsushita-Hitachi deal is Canon that will team up with Matsushita to pump a couple hundred billion yen into Hitachi Displays Ltd., which is developing organic light-emitting diode (OLED) panels. Companies from Sony to Kodak to Sanyo have plunged into the bright OLED business, with expectations of another great leap forward this year—akin to the jump in OLED screen size that surfaced at the 2007 CES.
By some measures, these deals are just the beginning of a new display battle. For example, the fast evolving IMOD displays are even brighter than LCDs and consume far less energy—a strong selling point in the “green” movement. (Look for a continuing spate of reports about the intense power consumption demands of big screen, flat-panel TV sets, which can drive up a home electricity bill by $300 to $400 per year, according to some cynics.)
IMOD technology is initially being promoted for mobile phone and other portable devices with a small, battery-powered screen. Qualcomm, the mobile technology giant, has invested heavily in IMOD development, with an eye toward using the technology in future mobile electronics devices, from phones to portable media players (the future of TV distribution, by some accounts).
HOW MUCH LONGER?
At the big-screen end of this equation, not everyone is ready to write off plasma yet. Research firm DisplaySearch believes the outlook for plasma TV cost reductions and performance improvements are closely tied to improvements in luminous efficacy. In a recent DisplaySearch report, it describes how luminous efficacy levels can be increased, in turn leading to cost reductions and performance improvements. For more information, visit their Web site.
Other experts insist that LCD will dominate the next wave of sales of home flat-panel monitors because of several key factors. The price of smaller screen monitors continues to drop—LCD screens in the 35- to 39-inch range have fallen 41 percent in the past year, into the sub-$900 level. (Even prices of the larger LCD screens—more than 40 inches—have dropped 24 percent during that period.) The significance is not the price alone, but that “late adopters” and young, less-affluent shoppers now believe the monitors are affordable. This is where massive high-volume retailing kicks in, again just in time for the digital TV transition promotional extravaganza of 2008.
Plasma may continue to retain its high-end niche—fueled by connoisseur’s comments about darker blacks and better contrast. But improvements to LCD technology—with the big investments of Matsushita, Toshiba and others—will bring improvements. Experts are looking for less blurry fast-moving images and use of LEDs as backlights (which also happens to be a more energy efficient way to display deeper blacks on LCD monitors).
DisplaySearch expects that LCD sales will balloon $91 billion globally by 2010, while plasma screens limp along with just under $16 billion that year. Adding to the LCD expectations are the huge commitments that Sony, Sharp, Samsung and others are making as they build LCD factories including Matsushita’s eighth generation motherglass plant.
As a reminder of the continuing competitiveness, Sharp’s new factory is working on 10th generation glass.
The bigger question comes at the other end of the scale: the role of hand-held monitors and the future of portable video displays. With younger viewers apparently very comfortable watching small-screen video, OLED and IMOD take on even greater importance.
BRIGHT & CHEAP WITH IMOD
IMOD displays use interfering light waves to create bright colors on demand, based on a variation on MEMS (microelectromechanical systems) technology. As described in a November Scientific American magazine article, IMOD unit cells are much simpler than their LCD counterparts and could be built in existing flat-panel factories—an economic selling point to promote their introduction. Qualcomm is seeking applications in mobile handsets, GPS devices and personal digital assistants. Meanwhile, other developers are looking at IMOD implementations ranging from camcorders and electronic books to wall-mounted TV monitors.
One of the IMOD patent applications, filed by a subsidiary of Sharp, may augur the direction this technology could go including its competitive role. The Sharp patent application describes “optical thin film” with an “absorber layer” and a “display unit having a plurality of pixels.” Beyond the techno-speak, the idea emerges for low-power devices that could be used for “electronic paper” or for very thin, light, energy-sipping monitors.
Another recent IMOD patent application, filed independently, emphasizes the value for providing brightness control. But lest IMOD displays seem new, a 1994 patent application proposed its use for optical signal processing.
Timing is everything, as Qualcomm hopes to prove.
Hence this month’s high-stakes face-off on the LCD versus plasma battleground is merely foreplay for an even bigger display war ahead. Of course, mass market consumers who commit to a large-screen technology now may not be prepared to upgrade to future OLED or IMOD systems very quickly. But they may embrace the lower-priced technology for their handheld video devices.
As always, that’s the challenge to video marketers—and to the production and distribution value-chain behind them. It’s also a reminder of why the huge deals for big and small screen technology show no signs of abating.
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Gary Arlen, a contributor to Broadcasting & Cable, NextTV and TV Tech, is known for his visionary insights into the convergence of media + telecom + content + technology. His perspectives on public/tech policy, marketing and audience measurement have added to the value of his research and analyses of emerging interactive and broadband services. Gary was founder/editor/publisher of Interactivity Report, TeleServices Report and other influential newsletters; he was the long-time “curmudgeon” columnist for Multichannel News as well as a regular contributor to AdMap, Washington Technology and Telecommunications Reports; Gary writes regularly about trends and media/marketing for the Consumer Technology Association's i3 magazine plus several blogs.