Asia’s TV makers jostle to realise 3D vision

Inside a cavernous Panasonic television panel factory in Amagasaki, western Japan, GPS-guided robots whisk stacks of plasma screens down white-painted rooms hundreds of feet long.

After cooking for hours in 500C heat – to fuse pairs of thin glass sheets around a layer of light-emitting gasses – the panels will be shipped to assembly plants in Japan and around the world, where they will be installed in flat-screen TV sets including state-of-the-art 3D models.

Panasonic, which began selling 3D-capable versions of its Viera TVs in March, is hoping the visual feature will make consumers take a fresh look at plasma, a technology that has been overtaken by lower-cost liquid crystal displays in all but the largest models.

3D video looks best on big, low-latency screens that can project fast-moving objects smoothly – a traditional advantage of plasma over LCD screens.

“In the near future, almost all TVs will have 3D capability,” says Hiroyuki Nagano, president of Panasonic Plasma Display, which expanded the factory’s capacity to 9m units late last year. “3D is going to have a very significant impact on demand for plasma TVs.”

Forecasting demand for any new technology is risky and that is doubly true for 3D TV – which appears to repel as many potential viewers as it attracts. Half of the respondents in a recent Nielsen survey said they were turned off by the special glasses required to watch 3D images. When those who said they were interested in buying a 3D TV actually tried one, about half changed their minds.

Even so, the research firm iSuppli expects Japanese and South Korean electronics groups to sell 4m 3D TVs this year, with sales growing to 78m by 2015, or about two-fifths of the projected global flat-screen market.

The manufacturers pushing 3D technology hardest – Panasonic and Sony of Japan and South Korea’s Samsung – are looking to do more than lure consumers into upgrading to fancier sets. They are also eyeing knock-on gains from related hardware and content, including 3D video cameras, game software and films.

Sony, for instance, makes TVs, game consoles and video equipment, owns a film studio and is a core sponsor of Blu-ray DVDs, the only DVD format large enough to store a full-length 3D film.

With 3D, it hopes to prove its diversified strategy can generate moneymaking synergies. At last week’s Tokyo Game Show, much of its display was given over to upcoming 3D video games for its PlayStation console. Attendees were invited to don 3D eyewear to frolic with a monkey-like virtual pet, using Sony’s just-released Move motion-sensing controller – a gadget the company hopes will be its answer to the popular Nintendo Wii.

So far, it has been Samsung, the dominant force in the overall flat-screen TV market, that has sold the most 3D sets.

“Korean companies have an advantage in terms of securing panels and other components as they are vertically integrated,” said Cho Woo-hung, analyst at Daewoo Securities.

A strong Japanese yen relative to the South Korean won has also helped.

Samsung has a target for this year of 2.6m units, while in the slightly later Japanese fiscal year to next March, Sony hopes to sell 2.5m and Panasonic 1m.

Other manufacturers such as South Korea’s LG and Japan’s Sharp, Hitachi and Toshiba are planning or beginning to sell 3D sets.

Hisakazu Torii, analyst at DisplaySearch, says there are signs that demand for the still pricey TVs could be cooling along with major market economies. “We could see some headwinds at the end of the year . . . Companies might fall short of their aggressive targets.”

The damage from short-term over-investment would probably be small, however, since 3D TVs use standard plasma or LDC panels with a few small tweaks, and making them does not require expensive new factories or assembly lines.

The more pressing question, analysts say, is how long producers can maintain premium prices – now about $500-$800 higher than for 2D-only models for sets larger than 42 inches.

Given stiffening competition, the relatively low extra production cost and the still limited range of 3D content, it may not be long.

“The premium is likely to shrink faster than manufacturers hope,” Mr Torii says.

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