Rear-Projection TVs Seem Headed for Extinction
A year ago, Sony executives at the company’s annual line show declared plans to extend the company’s successful Bravia LCD TV subbrand to its line of microdisplay-based rear- projection TV sets. The “Braviazation” of Sony’s rear- projection TVs, as Sony executives called it, would breathe life into a category that fast was losing valuable retail floor space to the more-popular flat-panel LCD TVs and plasma sets.
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Applying Bravia to microdisplay-based rear-projection TVs would at least allow Sony to increase its share of that category, a Sony executive said then. “Being very honest, next year I think we're going to see a decline in the total number of units in the microdisplay category,” he said. The Braviazation of microdisplays typified what manufacturers needed to do “to make that category fit into people’s lifestyles,” he said. “It used to be just the biggest screen, but now it needs to be more than that.”
Those responsible for the Braviazation of Sony rear- projection TVs had hoped by now to be basking in the success of their rebranding effort. But the campaign was ended even before the 2007 holiday selling season was over. In mid- December, with little warning, Sony announced it was abandoning the microdisplay-based rear-projection TV category. The reasons became clear when the company released third-quarter financial results in late January. They showed that its rear-projection TV category was awash in $100 million losses that Sony will spend months trying to mop up.
The reasons relate less to any Sony mismanagement than to signs that the rear-projection TV itself may fast be headed to extinction. In Q4 alone, rear-projection TV shipments in North America plummeted 54 percent from a year earlier to 340,000 units, according to new DisplaySearch figures. LCD TV shipments soared 60 percent to 8.9 million units, while plasma TVs rose 6 percent to 1.23 million.
Unit and revenue performance in microdisplay-based rear- projection TVs “fell short” in 2007 as strong unit sales of the larger screen sizes failed to sustain category growth year-to-year, said another firm, Quixel Research. Compared with their flat-panel TV competition, large-screen microdisplay-based rear-projection TVs “offered consumers a great value and subsequently, we saw sales for the 60-inch- plus segment hold steady in the back half of the year,” said Quixel analyst Tamaryn Pratt. “It was the 50-to-54-inch segment that really lost ground in 2007 and this segment has traditionally been the workhorse of the category.” According to Pratt, “fast-falling” average selling prices in plasma TVs ate into rear-projection sets in 50-to-54-inch sizes, causing sales to fall over 50 percent. As a result, rear-projection TVs 60 inches and larger captured 41 percent of the microdisplay market in 2007, compared with 36 percent in 2007.
But there’s little appetite left at retail for larger and larger rear-projection TVs that take up valuable floor space from the ever-more popular flat-panel sets. Besides Sony, Hitachi and Toshiba recently dropped rear-projection TVs to focus all their resources on flat-panel. Now the signs are that Panasonic could be next. Panasonic hasn’t commented on reports of plans to close its rear-projection TV assembly plant in Vancouver, Wash., next month, another blow to the category. Panasonic will lay off 89 workers at the 22-year-old factory, according to a spokesman for the Port of Vancouver, which leases the 300,000-square-foot building to Panasonic. Whether the closing signals Panasonic’s departure from rear-projection hasn’t been determined. But a summary of Panasonic’s 2008 TV line circulating among retailers lists no new rear-projection sets. Panasonic last year carried six LCD-based models 50W and larger, including 61W 720p and 1080p sets.
If Panasonic gets out of rear-projection TVs, Mitsubishi and Samsung will be the only major brands left. The companies will offer DLP-based sets, Samsung starting at 50W and moving up through 56W, 61W, 67W and 73W, company officials said. Mitsubishi will have a single 60W model as well as 65W and 73W sets, dealers said.
But few other CE makers are showing much interest in the category, including companies that showed new models at January’s Consumer Electronics Show but have no plans to market them at retail. Their reluctance goes to the core of rear-projection’s uncertain future. Once the showpiece for big-screen, high-end home theater, rear-projection is trying to fend off the fate of the dinosaurs. If there are only two major suppliers, that suggests the category won’t be around long, some observers say. Still, others find bright spots. One retailer said, “Even if the rear-projection business shrinks 30 to 40 percent this year there will still be a lot of business for two” companies.