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Canon and Toshiba said on Wednesday they would delay the launch of their much-anticipated next generation flat panel TVs that use SED technology because of collapsing market prices and a need to improve the production technology.

The two groups, which have been collaborating on developing the TVs since 1999, are pushing back their launch until July 2007. The initial target had been to commercialise the TVs this spring.

The delay is a setback for Canon in particular, which has bet billions of yen on the new technology and has positioned flat panel TVs as a pillar of future growth.

Fujio Mitarai, Canon president, said he would like the group to gain at least a 20 per cent market share by 2010 in the relatively large size segment of the flat panel TV market. The delay makes this goal look increasingly ambitious.

“I am not surprised [about the delay] because it is a difficult technology. According to our forecast, SED will still be a very small part of the flat panel TV market in 2010,” said Hisakazu Torii, analyst at DisplaySearch in Tokyo.

SED, or surface conduction electron emitter display, panels are like a collection of small cathode-ray tubes – the tubes that form the basis for conventional TVs. SED TVs provide very clear colour and do not require a back light, reducing electricity usage and materials costs.

Canon and Toshiba said that plunging prices in the flat panel market were a key factor behind the delay.

“Prices have fallen 20 per cent on average, after falling 30-40 per cent last year and competition is fierce,” said Toshiba.

Consequently, the two groups must improve the mass production system so that the SED TVs are cost-competitive with LCD and plasma TVs as well as profitable, Canon and Toshiba said.

Canon and Toshiba have also faced challenges in developing the production equipment and systems for the new technology.

“[SED TVs] are very high quality and beautiful but the question was always whether they could really mass-produce it,” said Mr Torii.

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