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TV firms’ hopes ride on 4K shift to ‘bigger, smarter’

by Kazuaki Nagata

Staff Writer

Japanese TV makers are desperately seeking new strategies to revive their flagging operations, and some of the key points include expanding screen sizes, boosting image quality and making them “smarter” and more user-friendly.

With midsize televisions barely turning a profit, the nation’s electronics giants are banking on large-screen TVs and so-called 4K, or ultrahigh-definition, models. A 4K panel has four times as many pixels compared with the full high-definition HD panels installed in many of the current TVs.

While pursuing image quality, makers are also trying to enhance user friendliness by making TVs “smarter,” by connecting them to the Internet, smartphones and tablet devices so users can access their preferred content more conveniently.

Experts said these tactics appear logical, but Japanese companies are still expected to face tough competition from other Asian rivals, including South Korea’s Samsung Electronics Co., in the coming years, as they, too, are set to begin offering bigger, clearer and smarter TVs.

At last month’s International Consumer Electronics Show in Las Vegas, the world’s biggest annual electronics trade show, the eagerness of major global TV makers to create momentum for 4K televisions was evident as they proudly showed off their state-of-the-art large-screen 4K offerings.

So why does size and 4K imagery count so much? Because price tags for midsize TVs, such as 32-inch and 40-inch products, have rapidly declined around the world in the past several years, making it a tough environment for Japanese makers.

This has prompted them to focus on more profitable large-screen TVs. When screens get bigger, even HD screens become a bit rough. Thus 4K was introduced to continue to provide rich, sharp images.

“In reality, the demand for large-screen TVs is growing around the world. And there is a question of whether it’s really OK to keep providing full HD for 50- or 60-inch televisions,” said Atsushi Ido, a spokesman at Toshiba Corp., which has already released a few 4K models at home and overseas.

Keizo Masuda, a PR manager at Sony Corp., cited a survey conducted by a research firm that found the average retail price of Sony TVs was in excess of ¥100,000 as of December, compared with around ¥60,000 in December 2011, thanks to the shift to large-screen TVs.

It is the mission of TV makers to pursue image quality, thus 4K is a natural evolution, manufacturers argue.

With the growth of smartphones and tablets, people can view videos and movies anytime and anywhere. But the screens of these devices are small, so the ability of televisions with rich, realistic images on big screens that provide exciting viewing experiences for consumers is becoming ever more critical, they say.

But experts warned it will take a while for 4K to become widely accepted among general consumers.

The “(4K TVs) are very expensive at this point because they are still new. . . . I think it will take a while to start spreading widely,” said Eiji Mori, a digital products analyst at Tokyo-based market research firm BCN Inc.

Sony released an 84-inch 4K television in November for ¥1.68 million, while Sharp Corp.’s 60-inch model debuted this month at ¥2.62 million. Toshiba’s 4K TVs are more reasonable, but they still cost more than ¥400,000 for a 55-inch model.

NPD DisplaySearch, a U.S.-based research firm, projects that shipments of 4K TVs will start to increase this year and 2016 will see about 7 million units shipped. In 2011, about 250 million TVs in total were shipped.

Experts and Japanese manufacturers forecast that 4K technology is likely to spread eventually. And to lead the race, one advantage that domestic makers say they have is a technology to convert full HD images into almost 4K quality with a high-end image processing chip.

For 4K to work properly, the content itself has to be captured by cameras capable of shooting such sharper images. However, the chip can convert non-4K content to near 4K quality.

Still, experts warn that exactly what happened to the midsize LCD TV sector could hit the 4K TV market in the future.

“Except for the image processing technology, other makers can easily manufacture 4K TVs if there are 4K panels, so Japanese makers could face price competition” from foreign rivals, said Hisakazu Torii, vice president of Japanese TV market research at NPD DisplaySearch.

While improving the image quality is one central strategy, another tactic is to make TVs smarter. The term “smart TV” has been a buzzword in the industry for the past few years, as more Internet features have been incorporated into televisions.

Masuda of Sony said the firm aims to seamlessly link its variety of devices — including smartphones, tablet computers and video game consoles — with each other to give users access to a total Sony experience. In addition, Sony also has its own video content, which can be incorporated into its smart network.

On top of linking TVs with mobile gadgets, Toshiba is trying to improve user-friendliness through Internet-based services, including one that recommends specific TV programs and scenes to users based on popular keywords on the Web.

Yet rival makers are also pursuing the smart TV angle, and it is unclear if Japanese makers’ efforts will become a definitive asset to help their TV businesses, according to experts.

“For the next several years, I think the makers will probably be trying to find out what the right concept of smart TV really is,” said Torii of NPD DisplaySearch, adding that the way in which consumers watch television differs markedly from country to country, so it will be crucial to do local-level marketing and provide products that match local needs.