Sony Exits Rear-Projection TVs

Posted by: Kenji Hall on December 27, 2007

Mention Sony TVs and the Bravia line of flat-panel liquid-crystal-display sets comes to mind for most people. And no wonder: The marketing behind Sony’s flat TVs has been nothing short of brilliant. (Check out the 2005 Bravia ad in which thousands of colored balls bounce down the hills of San Francisco to the Jose Gonzalez tune “Heartbeats”.)

It’s easy to forget that Sony is the world’s biggest manufacturer of rear-projection TVs. These are sets that are slightly thicker than either of the two dominant flat-screen TV technologies but can be made in giant sizes and have been popular among U.S. consumers. From the outside, they resemble the old picture-tube sets a bit but inside, instead of the tadpole-shaped cathode-ray chamber, they house a tiny projector that casts images onto the screen that you see.

Today, Sony confirmed its plans to pull out of its rear-projection TVs business, halting production in late February. The three plants in Japan, Malaysia and Mexico where it produces these TVs won’t miss the load; they’re busy making other products such as LCD sets, Blu-ray DVD players, and projectors.

You won't find an analyst in town who hadn't seen this coming. Seiko Epson dropped rear-projection TVs in October and Hitachi said last month that it would no longer sell rear-projection sets in North America.

Basic economics are at work here: Rear-projection TVs sales have been declining, as flatter screens become more affordable. Market tracker DisplaySearch's forecasts from earlier this year showed that global rear-projection TV sales have been falling since 2004 and are expected to continue doing so. This year, TV makers are expected to ship less than 3 million units, down 26% from around 4 million in 2006. Contrast that with a more than 30% gain (to nearly 13 million units) for plasma TVs and roughly 60% growth (to more than 70 million) for LCD TVs this year and you see why Sony is happy to focus on LCDs.

Sony shipped just over 1 million rear-projection TVs last fiscal year, which ended last March. This year, it's expecting the figure to be around 400,000, a figure revised in October from an earlier estimate of 700,000. The 37-inch to 60-inch sets that Sony has been making were a hit in North America. There, big living rooms could easily fit one of these monsters. Also, rear-projection sets tended to be cheaper than the competition because they used micro-display devices and didn't have to be cut from giant specialized sheets of glass in state-of-the-art factories like LCD and plasma sets.

But in most markets around the world, space is an issue. And with competition pushing prices of LCD and plasma sets down by 30% a year, the price advantage rear-projection TVs once enjoyed has mostly vanished. Many consumers now walk straight past the rear-projection TV aisle and head for the LCD and plasma sets. Sony is just responding to the realities of the marketplace--and its own aim of making TVs, which are less than a fifth of revenues, a profitable business. (Ever since Sony began making giant-screen LCDs at a new plant run in a joint venture with Samsung this past summer, it's risked cannibalizing its own products by keeping rear-projection technology alive.) That's good news since it will free up resources for the company to throw at the ramp-up of its LCD business and its newest TV technology, organic electroluminescent displays (also known as organic light-emitting diodes, or OLEDs).

Reader Comments

Brian McGlone JR

January 2, 2008 8:45 PM

bring the projection tv back, don't for get your customers

Paul S. Cooper

February 14, 2008 1:19 AM

Sony:
Either drastically cut the price of the 70" LCD, or bring back the 70" rear projection. I own all of your recent large TVS. I would pay $15,000 for your 70" LCD TV. I would pay $10,000 for a 70" rear projection.
Please do not abandon the 70" market.

jim reburrle

March 1, 2008 8:22 PM

Who cares.
Tv is a video wasteland not worthy of anyones attentionl

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