Posted by: Kenji Hall on October 1, 2007
The future of Sony’s flat TV business is a set with a screen that measures just 11 inches diagonally and rotates on a swivel arm. In an era when the trend is for ever-bigger screens, Sony’s XEL-1 TV is an anomaly.
But as ludicrous as it sounds, the TV marks a huge technological coup for the Japanese electronics and entertainment giant: When the set goes on sale in Japan on Dec. 1, Sony will be the first company anywhere to commercialize an organic electroluminescent display TV. That’s a big deal for Sony, and not just because it took 14 years of research to reach this point. The company got such a late start in flat-screen TVs that it needed a tie-up with rival Samsung Electronics of Korea to even be competitive. “A few years ago, people were saying that we had the technology but lacked must-have products,” Ryoji Chubachi, Sony’s president, told reporters on Oct. 1. “OLED TVs are a symbol of the revival of a technology-focused Sony.”
Experts say organic electroluminescent displays could be the biggest innovation to reach the TV market in years. They’re a big step up from current flat-panel technologies because they can be made wafer thin. They also offer a picture that’s crisper and truer in color than either of the dominant technologies, liquid-crystal displays or plasma displays, and the screen response time is fast so images don’t blur during fast-action scenes. The high-definition images of flashing neon lights at night and the sea in bright sunlight that Sony showed on the XEL-1 were so clear it almost appeared as if you might be peering at them through a window. Sony’s hope is that it can eventually expand on its 5% share of overall TV shipments it had earlier this year. (Its share of LCD TVs is bigger, at 13%, according to iSuppli.)
But for now Sony’s new TV is for bragging rights more than profits. The company timed the announcement to fall on the eve of the annual CEATEC consumer-electronics and technology show in Chiba, just east of Tokyo.
Katsumi Ihara, executive deputy president, sidestepped questions about whether the TVs would be profitable. Other officials noted that one of the reasons for commercializing the technology now is to get feedback about the technology’s pros and cons in preparation for the next generation of OLEDs. In a note to investors in April, Goldman Sachs analyst Yuji Fujimori called the technology “promising” but said he expects “little near-term earnings impact.”
That doesn't take away from the significance of Sony's accomplishment. The XEL-1 display's side profile surpasses any other in thinness, at a mere 3 millimeters. That's partly because the set is so small. As the TVs approach the 40-inch to 50-inch range--if that's even possible--they would have to be made thicker to prevent warping or breakage, industry insiders say. Yoshito Shiraishi, who led the development of the XEL-1, dismissed concerns that a screen so thin might crack or perform poorly if handled roughly, saying it has a dual-layer panel inside that's rigid and chemically stable.
The secret to its slimness lies in the way the screen is made. Organic electroluminescent displays—-also known as organic light-emitting diodes, or OLEDs—-rely on a special polymer layer with "pixels" printed directly onto it. The layer itself emits light when an electrical current passes through. That means there's no need for a backlight, like LCDs, or a pocket of space for a chemical reaction, like plasma panels—factors preventing today's flat-screen TVs from being made even thinner. And since OLED pixels only consume energy when they're in use, they can consume up to 40% less energy than LCDs.
Sony plans to make 24,000 of the sets a year on a retooled line at an existing factory in Japan previously run in a 50-50 venture with Toyota Industries. It will be targeting well-heeled consumers in Japan—-the type who frequent first-class Japan Airlines lounges and Lexus car dealerships—-who want a small TV for the study or office. Officials declined to comment on plans for overseas sales.
Still, Sony's XEL-1 is hardly big enough to make a dent in the LCD and plasma market. Most of the world's key TV brands offer their high-end sets in the 30-inch to 60-inch sizes. Sony is nowhere near that. Since the beginning of the year, Sony has toured international trade shows with a 27-inch OLED set. But in May, Yasunori Kijima, an engineer and senior manager in Sony's display device group acknowledged to reporters the difficulties of mass producing big sets. He also said the 27-inch OLEDs rely on a different manufacturing process from the 11-inch sets. Recently, market research firm iSuppli's TV analyst Riddhi Patel devoted a mere five paragraphs of a 38-page global TV market report to the technology, and none of Patel's predictions through 2011 even mentioned OLEDs.
OLEDs mainly have been used in cell phones, car navigation systems and medical devices for years. Many have touted their potential as TV sets, but scaling up to bigger sizes has proven tricky. And despite Sony's accomplishment, it's unclear whether the company can produce a full-fledged lineup of OLED TVs efficiently and for a profit, says one executive at a rival Japanese TV maker that's researched OLED TVs.
OLEDs are attractive because they could be rolled out with inkjet or screen printing technology, unlike LCD and plasma panels screens which are cut from giant sheets of glass. Currently, only a few companies-—including Japan's Seiko Epson and Samsung Electronics of Korea--possess the know-how to make giant OLEDs. But no manufacturer has figured out how to make such panels last more than a couple of years, which is what makes them perfect for portable gizmos but not ideal for TVs. (The average TV is designed to last between seven and 10 years.)
Sony says its technology won't conk out prematurely and burn-in, in which faint images stay on the screen, isn't a problem. The prototypes they've tested should last at least 10 years if left on for eight hours daily. Expect many more improvements by the time average consumers can afford a Sony OLED TV.