Reports say that Panasonic may exit the plasma TV business in the near future. Panasonic is the consumer electronics giant in Japan, but they are willing to leave the unprofitable plasma TV sector. In poker terms, this is a good fold. The company has lost billions in the TV business over the last few years.
During the 1980s, the two types of monitor technologies available to consumers were CRT monitors and LCD monitors. LCD panel technology quickly became the choice for flat panel monitors over CRTs. The market for LCD panels exploded during the 1990s fueled by new portable electronics and laptop PCs.
Despite the growth in the LCD segment, Japanese electronics companies were considering alternative display technologies because engineers believed that LCDs could have technical limitations with larger sized panels. Several new display technologies were considered for large-sized flat panel TVs, but plasma displays were the choice in the early 2000s. However, LCD displays enjoyed the highest market share because of significant improvements with a high market share over the years.
It quickly became a two man fight – plasma vs. LCD. Panasonic was the industry leader in the plasma group and Sharp was the industry leader in the LCD group. Hitachi and Pioneer dabbled in the plasma segment, but quickly dropped out and switched over to the LCD group.
Panasonic is the last major TV manufacturer of plasma TVs in Japan. They invested billions of dollars in Japan to build manufacturing plants to support the production of plasma display panels. This sequence of events reminded me of the VCR wars between Panasonic and Sony 30 years ago. Panasonic did not have any technological advantages against Sony, but came out on top from its marketing superiority and strong global sales network. I think that Panasonic strategists believed they could come out on top again by applying the same formula – an intense marketing campaign coupled with an aggressive sales force. Unfortunately for Panasonic, this formula did not work.
The company struggled for several years after their huge investment, and lost billions. The plasma segment is not profitable, and Panasonic decided not to lose their whole stack – they will fold their hand.
The LCD TV is the overwhelming favorite in the Japanese market. Some consider Sharp the category leader, but can they hold a position of superiority? The reality is that Sharp has suffered mounting losses against its rivals. They need to become more innovative and competitive in an industry that is extremely dynamic. Sharp could suffer the same as Panasonic.
The latest and greatest product within the TV segment is the new Ultra HD 4K. All major electronics companies in Japan have thrown their hat in the ring and are promoting the ultra high definition TV available with LCD or OLED displays.
A new game has started, and this one may be winner take all. Or the companies will repeat the same story as the 3D TV made few years ago.
DKN Research, www.dknresearchllc.com
DKN Research Newsletter #1328, Oct. 27, 2013 (English Edition) (www.dknresearchllc.com)
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1. Mitsubishi Electric (major electric and electronics company in Japan) has unveiled a new full color TFT-LCD with touch screen for business uses. It is available with gloved hands.
2. ADEKA (chemical company in Japan) developed a new additive for copper plating bath of TSV. The new additive simplifies process control.
3. Sharp will start volume production of high resolution IGZO LCD panel at Kameyama Plant for smartphones by the end of 2013.
4. Toshiba will roll out new models of CANOVIO Series, portable disc drives with 1/2 to 2 TB capacities. Users can access from Smart phone or tablet PC through internet.
5. Fujitsu and Murata have agreed to cooperate for sharing component data library for noise analysis of assembled printed circuit boards.
6. AIST (public R&D organization in Japan) co-developed a new spin torque diode for high frequency electronics. The sensitivity of the new device is three times higher compared with traditional semiconductor diode.
7. Riken (independent R&D organization in Japan) has co-developed a new thin film structure for organic photovoltaic cell to increase voltages.
8. Toshiba has unveiled a thin 1TB 2.5” hard disc drive “MQ02ABF100” for personal computers. It has two discs in 7mm-thick housing.
9. JDI (Major display panel manufacturer in Japan) named Jeff Hsu, ex vice president of Innolux, as CEO of the marketing subsidiary in Taiwan.
10. Panasonic commercialized a fully automatic conveyor robot, “HOSP” for hospitals. It does not need construction under the floor.