Sony Joins 3D Bandwagon in S. Korea
Struggling Tokyo-Based TV Maker Eyes Breakthroughs
By Kim Yoo-chul
Staff Reporter
Japan's Sony, which is doing everything it can do to better compete with Samsung Electronics in televisions, is eyeing an increased TV share in the South Korean market ― a tomb for foreign consumer electronics players.
But this time, the struggling Tokyo-based company may get more chance to attract domestic buyers as it is planning to sell full high-definition (HD) 3D LED-backlit LCD TV sets from July at affordable prices.
The plan has mostly been welcomed by consumers here who are eager to buy sets at discounted prices and raises the possibility that Samsung Electronics and LG Electronics will join the price competition, analysts say.
"We can confirm our July launch plan of the sale of 3D flat-screen television sets in South Korea," Hong Ji-eun, a representative at Sony's South Korean branch, said Monday.
Officials expect Sony to introduce the edge-lit based 3D LED-backlit LCD TV sets with two sets of 3D glasses.
The BRAVIA-branded sets can easily convert 2D content into 3D, using virtually the same technology that has been adopted by Samsung Electronics with its 3D TVs.
"Sony will be better positioned for price competitiveness. Although it's too early to talk, we are considering reviewing the possibility of starting pre-order sales," Hong added.
The suggested retail price has yet to be announced. But Sony will start selling a 40-inch 3D LED-backlit LCD TV set for 3.66 million won, while that of the 46-inch is expected to sell at 4.4 million won, according to sources.
"The price ranges of Sony's 3D LED-backlit LCD TVs to be sold in South Korea will be decided without much difference from those in Japan," an industry insider said. Hong declined to comment.
Samsung and LG Electronics have already begun shipping their 3D TVs to domestic customers.
Samsung and LG are selling their 55-inch 3D LED-backlit LCD TVs with retail prices between 5 million and 6 million won.
The news comes at a time when Sony is busy streamlining its key units and realigning its electronics business strategy by placing more focus on 3D-related consumer products.
Since 2006, the market gap with Samsung Electronics in TVs began widening. It even relinquished the world's No. 2 TV maker position to LG Electronics.
Sony is still in the midst of a general restructuring but much of this is focused on its electronics division, which has been chronically unprofitable. Within that, the toughest ― and highest profile ― part of the task at hand is the TV business.
Although Sony is not withdrawing from any products or segments, it has cut its 57 factories down to 42, and its eight TV factories down to four. Executives say the biggest part of the restructuring is now complete but that work still remains to be done.
Citing the procedures, analysts say Sony believes it is better placed to compete with Samsung in TVs.
A senior executive said the cost of production itself is now going to be quite competitive, though Samsung has other strengths such as an in-house supply of LCD panels.
"Sony is aiming to build an overall eco-system from content, software to finished products as it has competitive edges in 'software' initiatives. It plans to invest the saved money from outsourcing to maintain its software initiatives, which is a critical factor for the success of 3D TVs," Lee Jeong, an analyst at Hana Daetoo Securities, said.
"That's a part of the reason that Sony is showing rare confidence in 3D televisions in South Korea."
No Guarantee
But Sony is also facing a dilemma. Although the Japanese company has already confirmed its 3D TV sales for the fiscal year 2010 at 2.5 million, Sony is not the only player. There's no guarantee that the market will continue its upswing.
Samsung is planning to sell 2 million 3D TVs, while LG Electronics is aiming to become the top 3D TV seller within two years by selling 3.4 million, according to the companies.
"3D technology is in the early stages at this time. There are few quality 3D broadcasters and few 3D movies available on Blu-ray disc right now, cutting down the possibility of a 3D jackpot," an employee at one electronics shop in southern Seoul, told The Korea Times.
"You will pay an extra $500 or so for the TV and Blu-ray player. HDMI 3-D pass-through receivers start around $300. Meanwhile, you will need glasses for everyone in the family. They are $100 to $150 per pair," he added.
Adding further uncertainty is the huge prediction gap for the market. Samsung Electronics is seeing the global demand for 3D TVs will reach 7 million by the end of this year, however, LG Electronics expects the demand to remain between 3 million and 4 million.
Although they have no big questions over Sony's strengths in 3D-related components, analysts say it will be difficult for the Japanese company to see a significant increase of its TV shares in South Korea due to its limitation in marketing expenses and ailing cash reserves.