Sony, Panasonic eye OEL TV tieup to weather rivalries

Kyodo

Sony Corp. and Panasonic Corp. are in talks to jointly develop a new generation of organic electroluminescent television displays by 2015 featuring crisper images and lower power consumption than current screens, sources said Tuesday.

Sony and Panasonic compete with each other in and out of Japan, but both have faced slumping TV sales and stiff competition, particularly with South Korea rivals, making a partnership that would have once been unthinkable a key option.

The deal would help the pair play catchup with Samsung Electronics Co., which plans to start selling 55-inch OEL televisions by year’s end, and with LG Electronics Inc.

Sony and Panasonic are aiming to reduce research and development costs through the partnership, the sources said.

Panasonic has been developing a low-cost production method and is planning to set up a demonstration facility at its Himeji factory in Hyogo Prefecture later this year by investing around ¥30 billion.

In 2007, Sony released an OEL television with an 11-inch screen but later ceased its production due in part to its high price tag.

Sony is currently manufacturing organic EL monitors for business use, including medical fields. Sony is also promoting developing OEL technology with Taiwan’s AU Optronics Corp.

The negotiations between the longtime domestic rivals in the consumer electronics industry came after both posted their largest-ever group net losses in the business year that ended March 31. Their money-losing TV businesses are suffering from sluggish demand and declining prices. In the year that ended in March, Sony posted a ¥456.6 billion consolidated net loss, while Panasonic marked a ¥772.1 billion loss.

Despite the reported collaboration, Panasonic tumbled 3 percent to ¥561 and Sony fell 2.6 percent to ¥1,128 in the Tokyo Stock Exchange’s morning session, with sentiment dampened by the yen’s appreciation.

“The tieup is a plus element over the long term, but (their share prices) were pushed down by the overall market tone,” an analyst said.

The news sent the stock of Sharp Corp., a major manufacturer of liquid crystal TV displays, to the lowest level this year. The analyst said Sharp could lose competitiveness if the Sony-Panasonic tieup is achieved.

OEL technology centers on an organic electronic material that illuminates on voltage variations. Manufacturers have already started using small OEL screens for mobile phones. Liquid crystal televisions require a light source in the back of a screen, while in OEL TVs, organic materials sandwiched by glass sheets themselves illuminate. This enables manufacturing of thinner displays than liquid crystals and brighter images.