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Last updated: March 23, 2011 8:34 pm
The clash is not simply normal competitive tension between South Korea’s largest consumer electronics makers. They are major suppliers of the panels used for making 3D televisions and each company is backing a different technology. Only one type of panel will become industry standard.
Television makers are hoping that 3D will revive the TV sector, where prices have been brought down by stiff competition. 3D televisions are at the high-end of home entertainment systems, with 55-inch models costing about $4,000 each.
Although sales have been disappointing so far due to high prices and a lack of content, market researcher DisplaySearch forecast that 3D TVs will account for more than 40 per cent of global flatscreen TV sales by 2014, from 2 per cent last year.
Samsung and LG make their own branded 3D TVs, and Samsung is industry leader with a 37.2 per cent market share, followed by Sony, Panasonic and LG with 5.6 per cent. But the two Korean companies also supply the core 3D component – the panel – to many non-Korean TV makers.
Park Kang-ho, analyst at Daishin Securities, compares the Samsung-LG battle with the clash over video formats 30 years ago – Sony’s Betamax versus JVC’s Video Home System, which JVC ultimately won.
Samsung panels use active shutter glass (ASG) technology, which involves viewers wearing bulky battery-operated glasses to create 3D effects. Its panels are used in Sony’s 3D TVs. Sharp and Panasonic also use the same technology but manufacture their own panels.
ASG had been the dominant technology until this year, when LG came up with film patterned retarder technology (FPR), which applies a film to a TV screen and works with cheaper and lighter polarised glasses, similar to those worn in the cinema. LG’s panels have been adopted by Toshiba of Japan, Philips of the Netherlands, Vizio of the US and some Chinese TV manufacturers.
Kwon Young-soo, president of LG Display, the company’s flat-panel subsidiary, said this month that glasses-free 3D TVs would eventually become commercially available. Until then, he said, consumers would decide which of the two incompatible technologies would stay.
The war of words got nasty this month. First, LG described Samsung’s 3D technology as “a generation behind” its own, while Samsung said the difference between its product and its competitor’s was “one of night and day”.
Then, Kim Hyeon-Seok, executive vice-president of Samsung’s visual display unit, said LG’s claim that its 3D TVs offer full high definition (HD) pictures was “an attempt to deceive consumers” and that the company had “no conscience”.
LG is also fuming over a recent Samsung commercial featuring a popular actor and a monkey wearing special 3D glasses with a caption next to the monkey asking: “Why is my 3D TV not fully high-definition?”
LG has hit back, saying it is in talks with Sony about using FPR instead of Samsung’s panels.
Mr Kwon says LG’s technology not only creates full HD effects but also provides better picture quality and is more cost-effective.
He adds that FPR has overcome a weakness in Samsung’s technology which leads to blurred and flickering images, which would cause eye strain and dizziness.
Analysts are saying it’s too early to tell which technology will emerge the winner.
“From a consumer’s point of view, it is hard to tell the differences in terms of 3D effects,” says Mr Park at Daishin Securities.
“What counts for them is content rather than technology,” he adds.
“I bet that 3D TVs are surely the industry’s next big thing but demand is unlikely to grow rapidly in one or two years unless prices come down and content is reinforced.”
While early adopters of 3D TVs mainly use them for watching movies such as Avatar, live sports in 3D is expected to be a major driver of demand.
James Murdoch, chief executive of News Corp Europe and Asia, said last month at a conference: “Customers will not want big events that are not in 3D at some point in the future because it is such an exciting and immersive experience.”
Hwang Joon-ho, analyst at Daewoo Securities, says: “What is needed at the moment is not a technology format war, but the development of more content to spur demand.”
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