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FOCUS: Japanese firms searching for partners to keep TV business alive(Japan Economic Newswire Via Acquire Media NewsEdge) TOKYO, May 16 -- (Kyodo) _ As Japanese electronics makers step up restructuring in their efforts to bounce back from massive losses in the business year that ended in March, they are seeking to team up with others in order to continue their television businesses. The three top Japanese TV manufacturers -- Sharp Corp., Sony Corp. and Panasonic Corp. -- are exploring ways to remain in the market, now led by South Korean firms, despite seeing their loss-making TV operations drag down their earnings last year. After Sharp announced in March that it will form a capital and business alliance with Taiwan's Hon Hai Precision Industry Co., Sony and Panasonic were found to be in talks to jointly develop a new generation of organic electroluminescence TV displays with an eye to commercializing the technology in 2015. OEL displays featuring crisper images and low power consumption are seen as a prospective product to lead the TV market. The market is currently dominated by liquid crystal display TVs, which are facing price declines amid oversupply and severe competition. In the global flat-TV market in 2011 South Korean firms Samsung Electronics Co. and LG Electronics Inc. held shares of 23.8 percent and 13.7 percent, respectively, in value terms, according to DisplaySearch, a research firm. Sony was third with a share of 10.6 percent, followed by Panasonic with 7.8 percent and Sharp with 6.9 percent, the U.S. research firm said. As his firm reported its largest-ever group net loss of 772.17 billion yen for fiscal 2011, Panasonic President Fumio Otsubo said TVs will remain an "innovative product which leads changes in society." Admitting that investments in the business turned out to be "excessive," Otsubo said it is highly unlikely the company will seek to go it alone if it decides to step into the OEL display business. "We will join hands with various best partners to avoid investment risks," Otsubo said. Sony is already marketing a 25-inch OEL display monitor for business use such as in medical fields and is considering jointly developing the technology with Taiwan's AU Optronics Corp. Sony President Kazuo Hirai said in April that the company will proceed with developing and commercializing OEL displays "with an eye to collaborating with other firms," but declined to elaborate. Sony is also planning to begin producing "4K" next-generation flat-panel TVs which display images more than four times finer than existing high-definition resolution. While Japanese manufacturers are struggling with their loss-making TV operations, Samsung Electronics and LG Electronics have both succeeded in developing 55-inch OEL TVs, the world's biggest, and are aiming to put them on the market by the end of this year. If their ongoing talks bear fruit, Sony and Panasonic will join forces to develop ways to produce OEL TVs at far lower cost than the ones which the South Korean makers plan to introduce, according to sources close to the matter. Success in developing inexpensive OEL TVs would help them catch up with their South Korean rivals, analysts said. Following reports Tuesday morning on the possible tie-up, however, the stock of Panasonic tumbled 3.1 percent to 560 yen while Sony was down 2.3 percent to 1,128 yen, as investors grew skeptical about whether the tie-up would really help them recover amid views held by some that they should simply withdraw from the unprofitable business, analysts said. Kazuharu Miura, senior analyst at SMBC Nikko Securities Inc., said the move shows the two Japanese rivals have adopted a business strategy of removing TVs from their core business. Panasonic is shifting its focus to the energy area such as lithium-ion batteries used for automobiles, while Sony has named digital imaging products including digital cameras, gaming and mobile product-related businesses as its core businesses for investment. "Though the TV business is no longer their core business, they cannot totally ignore it if there is a possibility of OEL display technology replacing the technology of existing TVs in the future," Miura said. Miura added that their decision to remain in the TV business albeit on a smaller scale is a "realistic option." While working to minimize losses or make the TV business profitable, they could find OEL technology can be diverted to making products other than TVs, he said. (c) 2012 Kyodo News International, Inc. |