Lack of Content Acute

3D TV Sales Hurdles Abound, Won’t Soon Go Away, Dealers Say At SID

May 28, 2010 by Mark Seavy|Top News

SEATTLE -- As 3D TVs begin filling retail shelves, lack of content and interoperable 3D glasses are among the biggest sales hurdles that seem unlikely to go away soon, dealers said during the IMS TV 3.0 seminar at the Society for Information Display conference.

Though 3D TV sales thus far have met retailers’ modest expectations, content needs to be available in a range of formats and get to market faster, Best Buy TV Strategy Director Steve Bosch said. While Best Buy’s 3D TV sales are so far “on track with what we planned for,” the technology has required retraining salespeople to “shift their focus to talking” with customers about broadband speeds and networking, features typically tied to PCs, Bosch said. Bosch didn’t specifically address the industry forecasts for sales of 3D TVs that range from 1.5 million to 4 million units this year. But late 2009 projections for sales of 1 million to 1.2 million units were “a little light,” he said.

The need for fresh 3D content will become more acute as consumers, having seen 3D movies in theaters, try to re-create the experience at home, other retailers said. “It comes down to, are we going to get enough content in the stores?” Bjorn’s Audio Video President Bjorn Dybdahl said. “I'm not a Best Buy and I can’t go out and strong-arm movie studios for content. If we get some content in sports and movies it would really add to the experience of customers.” While Bjorn’s in San Antonio has pushed its CE vendors for “good” content, “I have yet to get it,” Dybdahl said. PRO Group Executive Director David Workman agreed that “the issue is going to be fulfilling for the consumer the expectation of that moment that was created when they saw a blockbuster film and how we will capture that and translate that at retail."

Lack of interoperable 3D glasses and the need to be sure that the glasses won’t fail during a retail demonstration are other big hurdles, dealers said. Bosch repeated Best Buy’s call for a uniform standard on glasses so they're compatible across brands. High pricing of the glasses isn’t as much a concern because Best Buy thinks prices eventually will “come down to a reasonable level,” Bosch said. “The glasses, keeping them functional at all times and making sure the battery is operating, those have been the biggest challenges,” Bosch said. “We have done a good job of addressing some of the big concerns around [store] lighting, but glasses are a challenge. We are going to get better as we get more experience with them."

As retailers cobble together 3D displays, not every TV on the floor needs to demonstrate the technology, Workman said. Instead, retailers should “pick their targets” and build displays around “certain key areas of merchandise,” he said. “Trying to display every available set in 3D mode probably can’t be executed by just about every retailer out there."

The arrival of 3D TVs and the increasing mix of Internet-capable and LED-backlit LCD models may well raise average selling prices this year for specialty CE retailers, Workman said. “It’s almost less important what the entry-level price point for 32-inch is and more so what the overall ASP is,” Workman said. “If we can get back to $1,000-$2,000 price band in significant quantity, the aggregate ASP could actually go up. This may not be true for all channels, but for specialists, it’s probably the best shot of any year to see our ASPs go up."

The prospects for higher ASPs will rest on how promotional the retail environment becomes, retailers said. Best Buy and Amazon have had select discounts on 3D TVs. Amazon on Thursday was promoting Samsung’s 8000 Series 55-inch 3D model at $2,899, down from $3,499, for users who clicked through to the final checkout page. Amazon on its Web site said the “click through” policy was an accommodation to CE vendor “restrictions” on “how prices on their products may be communicated.” John Revie, Samsung senior vice president of home entertainment product marketing, declined to comment. Amazon Consumer Electronics Director Benjamin Hartman declined comment on his company’s present and future 3D TV pricing strategy. “I can’t speculate on what pricing will be in three months,” Hartman said.

SID Conference Notebook

Global LCD TV demand for LEDs will soar 70 percent annually through 2014 to 59.3 billion units as the technology accounts for 100 percent of backlights, said Ross Young, senior vice president at IMS Research. TV demand for LEDs was 2.5 billion units last year as LED-backlit models represented three percent of sets sold, said Young, the former DisplaySearch president. Edge-lit white LED backlight designs dominated in 2009, accounting for 90 percent of TVs sold due largely to lower cost. The two technologies will co-exist through 2014 with edge-lit targeting smaller sets, while direct LEDs are a staple of larger screen sizes, Vizio Chief Technology Officer Ken Lowe said. The “majority” of Vizio LCD TVs will be LED-backlit in 2011, up from around 40 percent at the end of this year, Lowe said. Global sales of LCD TVs are projected to hit 180 million units this year with LED-backlit models accounting for 22 percent of sets sold, Young said. By 2014, annual global sales will be 250 million units, Young said. While LEDs are in short supply, LED manufacturers are responding this year by installing 848 new metal organic vapor deposition system reactors to increase production, Young said. There will be another 780 installed in 2011, increasing the number of MOCVD reactors to more than 2,000 globally, Young said. The overall LED market, including the general lighting category, is expected to 188 billion units by 2014, up from 60 billion in 2009, Young said.

Samsung at SID demonstrated new 23- and 17.3-inch 3D-capable LCD panels it thinks will be available later this year, said Scott Birnbaum, vice president of Samsung’s LCD business for the Americas region. Both panels feature 1920x1080p resolution, with the 23-inch LCD delivering 300 candelas and 1,000:1 contrast ratio. The 17.3-inch panel has 200 candelas and 800:1 contrast ratio. Samsung has sold 22-inch 3D PC monitors under the Syncmaster brand. Samsung also has no immediate plans to move to 11th-generation LCD production, Birnbaum said. It currently operates 8G production lines and could switch to larger glass substrates if demand for 3D panels requires larger sizes, Birnbaum said. The 8G lines are ideally suited for 40-60-inch panels, he said. But Samsung also has produced 70- and 80-inch panels on the 8G line. Samsung also showed an 52-inch auto stereoscopic 3D panel that will be available later this year for commercial displays, Birnbaum said. The 52-inch panel features 1920x1080 resolution for 2D content, 640x360 for 3D, the company said. It has 600 candelas and a 2,000:1 contrast ratio.

Global Lighting Technologies in July or August will start production of light guides for 42-inch and larger LED-backlit LCD TVs in China with a goal of see them built into finished sets later this year, Sales Director Brett Shriver said. Global at SID showed a prototype light guide in a 42-inch edge-lit design with 192 white LEDs -- 96 on each of two sides. The single-sheet 4-mm-thick light guides can be scaled up to 65-inch panels, Shriver said. “We've taken everything we learned on smaller sizes and blown it up,” Shriver said. The new product line follows Wistron’s recent investment of up to $20 million to buy 17-19 percent of Global, which is building a light-guide assembly plant near Wistron’s Guangdong, China, manufacturing base. Wistron is seeking to expanding its LCD TV assembly business and counts Sony among its customers. Global also has factories in Shanghai and Suzhou, China, and has been trying to crack the LCD TV market for several years. It scrapped an earlier partnership with LED supplier Luminus and contract manufacturer Jabil Circuit. Global also is expanding into general lighting. It showed a 3-mm-thick light guide for a 2x2-foot ceiling light that contains 200 white LEDs and is expected to sell for $400-$600, Shriver said.