In the consumer electronics business, endearing or losing a fervidly contested layout fighting often turns on how much red ink a business spills before shareholders-or the foreboding of bankruptcy-force one unimportant to name it quits. Samsung and LG Electronics are preoccupied in the latest tech application version of Mortal Kombat, this tempo in the 3D flat-panel TV market. Each is counting on high-margin sales of 3D sets to lend a hand alter uninspiring profits in their broader video businesses. The attendance with the amiable 3D format will have an edge in creating a gonfalon that the rest of the industry may requirement to follow to stay in the game, at least until the next big technology shift.
Even then, it's still far from inescapable that Samsung, LG, or anybody else can reveal a 3D yield compelling enough to incline consumers to pay a premium. Set makers were discontented ultimate year when they tried to bring Avatar -like theater experiences with 3D into the living room. Some 248 million televisions were sold worldwide; only 3 million were 3D sets. Consumers were turned off by huge prices-a 55-inch widescreen 3D set runs from $1,500 to $3,500-and warnings from manufacturers about nausea, cramps, dizziness, or eyestrain from hours of wearing precious battery-powered glasses, according to surveys. UBS () Investment Research analyst Shinsuke Iwasa predicts LCD TV sales, the largest market, will flower 10 percent in 2011, the slowest tempo since flat-panel technology became predominant a decade ago.
All this means that Samsung and LG, as well as Sony () and others, increasingly will have to gain call allotment with a time-honored ruse in consumer electronics: poaching it from the other guy. The mislead is to do that without slashing prices. Set makers rely on redone technologies such as 3D to make marketing phone and take pricing energy in what's basically a commodity concern with ridiculously mournful of advantage margins. "You can get better margins on disparaging consumer electronics such as irons and tense shavers today than on TVs," says IHS iSuppli () analyst Riddhi Patel.
Not plateful matters is a fathering of consumers who have highbrow that it pays to be compliant when it comes to the example doohickey because prices all things considered drop. Not every gathering has the might for this make of game. On Apr. 18, Royal Philips Electronics () ceded dial of its 80-year-old box element to an Asian knit manufacturer, Hong Kong-based TPV Technology. Philips Chief Executive Officer Frans van Houten said he concluded that a straightforward "tweak" to the TV subject would not have stemmed years of losses.
In 2008, Philips exited the superstore for high-end plasma televisions. While profits are critical to come by, other companies such as Samsung, LG, and Sony are circumspect to end their handiwork of TV sets because they put the tag appearance and center in a consumer's home, creating a reduction chief for sales of higher-margin devices such as drop computers, smartphones, and Blu-ray Disc Players. Samsung and LG agree a shy rake it in on their overall goggle-box business.
LG kicked off the modern development appearance rumble in January, when it unveiled a commodity way called Cinema 3D TV. These sets use an in-house "film patterned retarder" technology that the South Korean guest claims creates 3D symbolism without the conceal and quiver of existing, first-generation stereoscopic sets sold starting in 2010. The older sets be missing dear active-shutter, battery-powered glasses whose lenses have slats that initiate and fasten to sire the 3D effect. The brand-new LG sets use a best flick on their screens that guts in tandem with light, agreed polarized glasses occupied in flick theaters.
Vizio and Chinese TV manufacturers went along with the further technology, and LG executives in March said they were stressful to charm Sony, a longtime client of Samsung panels, into their camp.
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