LG, Sharp, Chunghwa Fined For Price-Fixing

TWICE: LG, Sharp, Chunghwa Fined $585M For LCD Price Fixing

More details are in concerning the $585 million in criminal fines being levied against LG Display, Sharp and Chunghwa Picture Tubes by the Department of Justice's (DOJ) antitrust division for LCD panel price fixing.
In a release by the DOJ the three companies have agreed to pay the fines for their roles in conspiracies to fix prices in the sale of LCD panels. Of the $585 million in fines, LG Display will pay $400 million, the second highest criminal fine ever imposed by the department’s antitrust division.

Not to underplay the seriousness of the allegations, but's good to know that the US DOJ doesn't have any other pressing issues to devote their resources to.

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More Bloggotage On Circuit City's Bankruptcy

I've just been told by an inside source that at the same time that other video vendors like Sony and Toshiba and Sharp (who is only out $7 million, most of which is probably insured) were pulling back from Circuit City, Samsung was very aggressive in offering Circuit City sweet terms in an effort to hoover up market share from the other brands.

Now they’re on the hook for $115 million. Looks like that cunning plan didn’t pan out as well as they might have hoped.

And while I'm on the subject, what where the cowboys in Hewlett-Packard's national accounts office thinking? Looking at the creditor filing, what's startling is how far out in front HP is from everyone but Samsung, which makes me wonder if they had any risk management at all. There's no way that HP's $119 million in receivables is just 90 days current. Did they just think that they could stem the bleeding at CC by throwing product at them?

It makes me wonder how exposed HP is to other large retail partners, and how on top of the timely collecting of their receivables they are.

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Blu-ray vs HD-DVD still full of mixed tidings

It's still hard to draw a clear picture. Although, honestly, things aren't really looking so hot for either format.

On the one hand, Circuit City has just started clearing out all HD-DVD hardware and software. Rumours persist that it's not just inventory reduction prior to new hardware, but a commitment to go 100% with Blu-ray. If the latter, that might be the first indications that the struggling retailer is beginning to get its act together.

Yet on the other hand, there's evidence that the fantastic sales increase in Blu-ray players that was trumpeted last were salted with the free Blu-ray players offered as package deals with televisions by Sony, Panasonic, and Sharp. A free player is nice if you were going to buy a TV anyway, but it's not necessarily the driving decision maker, is it?

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Endgame for Blu-ray vs. HD-DVD?

With only 14 more sleeps until Christmas, the HD format war looks to be entering a new, final, and in my opinion, kind-of-desperate phase.

This week's A&B Sound flyer is chock full of HD offers. For example:

*FREE Sharp BDHP20U Blu-ray player with purchase of LC37D62U 37-inch LCD TV, only $1699!

*FREE Toshiba HD-A3 HD-DVD player with the purchase of 32HL57 32-inch LCD TV, only $1199 and NO GST!

*FREE Sony BDP-S500 Blu-ray player with the purchase of KDL40V3000 40-inch LCD TV, only $2299, and NO GST!

Prices so low they're crazy!

In all seriousness, from a retail perspective, these are astonishingly aggressive offers. In fact, were I in the market for a secondary television for a spare room, any one of those deals would make me seriously consider getting off the fence and taking a side, whether for Blu-ray or HD-DVD. For someone as hard bitten and cynical a retail hawk as me to say that speaks volumes for the appeal offers like this provide to the mass consumer.

Is the format war over? Hell no, it's just getting interesting. Who can prostitute give away enough players to reach critical mass for their installed base? Only time will tell.

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Sharp focuses on style over substance in new campaign

The Retail Bridge: Sharp Reworks LCD Sales Pitch

Forget pixel count, color depth and everything else you think you know about television performance. Flat panel TV buyers these days are more concerned with how their gear looks than how it performs.
At least, that's the message I get from the new U.S. campaign for Sharp's Aquos line of LCD HDTVs, announced Tuesday.Rather than focusing on picture detail, the new spots emphasize Aquos' physical design, emphasizing the "thinness" and "lightness" of the televisions, Sharp said.
"This campaign represents a true first in this industry," said Bob Scaglione, senior vice president and group manager of Sharp's Product and Marketing Group. "Although there is still the traditional focus on Full HD picture quality, this commercial explores a new idea and makes a design statement that strengthens the overall image of the Sharp brand. The ad depicts where we see the LCD industry going, as new design statements are introduced to provide consumers with the ultimate blend of style and performance."

Overall, this is an intelligent decision. Too much talk about "contrast ratio" and "120hz frame rate" just makes the eyeballs of all but the most technophilic customers roll back into their heads. This marketing directive operates on the same principle that successful retail CE salespeople understand: features don't sell products, benefits sell products. Customers, by and large, don't care how a TV works, just that they can be assured that it will have a nice picture, and will look all cool hung on their wall when it's installed.

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Samsung unseats Vizio as #1 TV brand

More evidence of the tospy-turvy Christmas retail season we're in for:

CNet.com Samsung regains TV lead; Vizio back to No. 2

A sense of order has been restored to the North American TV market this quarter.
A few months after newcomer Vizio stunned the flat-panel television industry by ranking No. 1 in market share for the second quarter of 2007, the old stalwarts have reclaimed their positions. Samsung moved back to No. 1 in overall flat-panel shipments with 11.8 percent of the total market, according to DisplaySearch. Vizio fell to No. 2 with a 10.2-percent share, down from 12 percent the previous quarter. The rest of the list includes Sharp at 10 percent, Sony at 8.6, and Funai (which makes the Sylvania brand) at a 7.2 percent share.
Samsung was able to regain its position because it has a strong presence in both the liquid crystal display (LCD) and plasma markets. Vizio is ranked No. 2 in LCD, but not in the top five of plasma vendors. Another key difference is Samsung sells mostly through national retailers, while Vizio's products have been popular in club stores.

Isn't it interesting how the only Japanese brands in the top five are Sony and Sharp? Of those two, Sony is the only venerable brand, Sharp being a relative upstart to the video business. And overall, three of the top five best selling brands can be considered price point, or bargain basement entry level sets. Maybe I'm prejudiced, but I still don't consider Samsung to be a first tier brand for television quality.

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Hitachi debuts new super flat panels

Thin is definetely in, as brands such as Sharp and now Hitachi are bowing new LCD sets that are thinner than Paris Hilton.


TWICE: Hitachi Unveils 1.5-Inch Ultra Thin LCDs

Hitachi revealed today it has developed a new line of 1.5-inch (35mm) Ultra Thin LCD HDTVS.Hitachi said it expects to be the first among a group of manufacturers preparing ultra-thin flat-panel displays to market the new products. The first Ultra Thin LCD TV series models are set to arrive on Japan’s retail shelves in December.
...
Models in the series will feature the 32-, 37- and 42-inch screen sizes, and the two larger models will have 1080p HD resolution. The 32-inch model, which will have 1366-by-768 resolution, will ship in the U.S. in first quarter of 2008 and the 37- and 42-inch models will ship in the U.S. in the second quarter of 2008. Prices will be announced later.

I'd like to point out that the Hitachi LCD's that I looked at in Denver during CEDIA were fantastic looking. Even better than the *gasp* Sharp LCD's which up until now I have considered to be the top of the heap.

In demo situations at trade shows, most LCD makers are very careful to use HD video demo material that is either still life, such as flowers and bowls of fruit, or very slow side pans, such as pretty girls strolling through forests and meadows. Since LCD's often choke on fast motion, action movies are right out for demos.

The 42-inch Hitachi LCD's in Denver had an HD loop running that included motocross racers tearing along at high speed, and the LCD's performance with fast motion was impressive. Virtually no stair stepping, and zero dropouts and lag.

Granted, I admit that I am a video snob, and most consumers are not going to notice the things that I notice, but Hitachi's entrance in the LCD business looks like a great leap forward.

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Sharp opens North American plant

In the same week that Toshiba announced their new LCD plant in Poland, Sharp has officially opened a new factory in Mexico.

TWICE: Sharp Christens First North American Panel Plant

Sharp Corp. officially opened the industry’s first LCD panel plant in North America yesterday, which will dramatically reduce lead times and increase production capacity for the U.S. market, the company said.
The five-month-old facility, located in Baja California, sits adjacent to Sharp’s
original Mexican TV plant, which began making tube sets ten years ago. But unlikeits forerunner, which now assembles LCD TVs from sea-shipped components, the new integrated plant is building finished TVs with LCD panels produced on-site from glass substrate flown in from Kameyama, Japan.

The Baja plant is an assembly plant, which will still reduce the logistical costs of marketing LCD TVs. For those of you in retail, don't be surprised at the knee-jerk reaction from some clients when they find out that their TV is no longer "Made in Japan." They'll get over it.

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Today on Gadget Talk: The Size of things to come

Marketnews Gadget Talk: Big Changes come in Small Packages

While the sizes may be unexciting, the leaps that are being made in LCD and OLED are going to be earthshaking, and will have a huge impact on devices with displays, from phones and pocket computers (will there even be two different categories in three year’s time?) to kitchen appliances, onwards to obvious things like laptop monitors and, of course, televisions.

Besides, today it’s a 12-inch display that’s less than an inch thick. Tomorrow it might be a 70-inch television hanging on your wall that’s no thicker. Now are you excited?

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Sharp tells us, Christmas is coming!

We had some issues with yesterday's Marketnews Gadget Talk guest blog:

Lee Distad's professional opinion: Today in Gadget Talk: It's October and Sharp drops their pants

So, for your reading pleasure, here's the original post, in all it's glory:

And They're Off!

So it begins. The calendar has ticked over to October 1st, and the first television manufacturer to fire a shot across the bow of their competitors is Sharp, who announced the first markdowns of the Holiday Selling Season (if you define the Holiday Selling Season as being a respectful distance from Labor Day, but well in advance of Canadian Thanksgiving).

TWICE: Sharp To Cut Prices On 6 Aquos Models

by Greg Tarr -- TWICE, 9/28/2007 10:10:00
AMMahwah, N.J. — Sharp is the first among several manufacturers to make pre-holiday flat-panel price cuts, confirming that it has dropped suggested retail pricing by $300 on three 52-inch Aquos LCD TVs and by $100 on three 37-inch models, effective Oct. 1.
Models receiving new lower prices include the 52-inch LC-52D92U (which drops $4,499 to $4,199), LC-52D82U (drops from $4,099 to $3,799); and the LC-52D64U (drops from $3,799 to $3,499).
Affected 37-inch models include the LC-37GP1U (drops from $1,999 to $1,899), LC-37D62U (drops from $1,899 to$1,799) and the LC-37D43U (drops from $1,599 to $1,499).
Representatives of the NATM buying group said Samsung, Sony and LG also recently announced price decreases on select flat-panel SKUs. Representatives of those companies did not respond to requests for details as this was posted.

Notice that according to the item from TWICE, other major brands are not far behind. I expect that we’ll find out shortly what Samsung, Sony, and LG have up their sleeves for Christmas. Markdowns from the Canadian offices of the same should be communicated before the week’s end.

For all the hand wringing and finger pointing that we in the industry do about declining margins and the so-called “race to zero,” collectively we keep engaging in the same behaviors. What’s that line about what it means when you maintain the same process, and expect a different outcome?

Granted, there are some brands, and some retailers who make an effort to sell the value that their products deliver, and try to offer quality and support, rather than just the lowest possible price, but looking at the industry as a whole, such efforts are like trying to sweep the ocean back off the beach.

On the other hand, on a smaller scale, building your own value and presenting yourself and your brand as something of value and not a commodity pays off for the companies that choose to play that way. Ultimately, if you and your boutique firm are successful and profitable, why should you be concerned if the big box stores insist on cutting their own throats?

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Today in Gadget Talk: It's October and Sharp drops their pants

Marketnews - Gadget Talk: It's October!

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Sharp and Pioneer collaborate to gang up on other brands

TWICE: Sharp Invests In Pioneer, To Jointly Develop Product

Tokyo — Sharp and Pioneer have agreed to form capital and business ties, with plans to join forces on the development of next-generation consumer electronics products.Pioneer said it will issue 30 million new shares to Sharp for $357.3 million on Dec. 20. The private placement will make Sharp the top shareholder of Pioneer, with a 14.28 percent
stake. Sharp will sell 10 million, or 0.9 percent, of its outstanding shares from its treasury stock to Pioneer for $172.3 million that month.
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The two companies said they will combine their expertise to jointly develop products in next-generation DVDs, audio, car electronics and displays.

The world's top LCD brand and one of the top plasma brands joining forces. This will be worth watching, to be sure.

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Sony and Samsung still happy together

IHT: Samsung-Sony joint venture begin shipping 52-inch LCD panels

SEOUL, South Korea: Samsung
Electronics Co. and Sony Corp. on Tuesday began shipping panels for large-sized flat screen televisions from the newest production line at their liquid crystal display joint venture.
The eighth generation line at the venture, called S-LCD Corp., makes panels of 46 inches and 52 inches measured diagonally from corner to corner."Our sights are now on LCD TVs in the 50-inch class and we aim to lead that segment," Chang Won-kie said in a statement. The first panels shipped were 52-inch ones.
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Samsung and Sony founded S-LCD in 2004 to produce panels to meet demand for flat screen televisions, which has soared in recent years as consumers give up bulky cathode-ray tube sets for the sleeker versions.

I'll be upfront and say that I have a personal bias against Samsung. I've never been blown away by their image quality. In addition, way back in the days when Rear-Projection CRT big screens were king, I was soured by an inordinate number of units that crapped out in client's homes one Christmas season. I admit that it's not particularly rational, but that's my bias.

I will be fair and say that Samsung did a fantastic job of promoting DLP technology to the marketplace, and were extremely innovative with it. Overall, Samsung has clawed their way to a premier position amongst electronics companies and they deserve their success, more or less.

It's probably a sign of both Samsung's star being on the zenith, and Sony's on the apogee that the two shacked up together three years ago to collaborate on LCD flat panels. CE today is a complex playing field, where competitors are also collaborators. Fifteen years ago it would have been unthinkable for Sony to partner with a rival brand this way. Of course, it's exactly that kind of thinking that has put them into the pickle that Sony now finds itself in.

With a course set for a slow, stately decline, Sony carries on like a fading empire, only mildly heeding the world around it, still self-consciously believing in its supremacy, but quietly hiring barbarian mercenaries to protect its borders from barbarian invaders.

Okay, maybe I spun that metaphor out a little far, but at the moment, Sony and Samsung combined haven't managed to usurp Sharp's technological primacy in the LCD business. Will they? I don't know. We'll have to see.

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Sharp sues Samsung over LCD patent infringement

TWICE: Sharp Files LCD Infringement Lawsuit Against Samsung

Sharp Corp. filed a lawsuit today alleging infringements of five of its patents on LCD-related technology by Samsung Electronics Co. Ltd. (Samsung) and its U.S. subsidiaries Samsung Electronics America (SEA) and Samsung Telecommunications America (STA) in the U.S. District Court in Marshall, Texas.
The complaint alleges that the following products infringe LCD-related patents that are owned by Sharp: liquid crystal display (LCD) modules manufactured by Samsung and sold in the United States by Samsung; LCD TVs and LCD monitors which incorporate the LCD modules manufactured by Samsung and are sold in the U.S. by SEA; and mobile phones which incorporate the LCD modules manufactured by Samsung and are sold in the U.S. by STA.
In the complaint, Sharp requests that the Court award compensatory damages to Sharp and prohibit the sales of the infringing products. Sharp also requests a jury trial.

Less tech savy readers may wonder why it's taken this long to go to tort. After all, how many ways are there to manufacture LCD panels?

Surprisingly, quite a few. Sharp still remains the industry leader in LCD technology, and last week announced their 10th generation panel technology. Most other makers are only using 7th or 8th Gen processes. This is, in simple terms, why Sharp's video displays are visibly superior to any of the other LCD brands that I have ever taken a hard look at.

Ultimately though, it all comes down to money. It was only a matter of time before another manufacturer stepped on Sharp's toes, intentionally or otherwise. As the article states, Sharp and Samsung have been negotiating a licencing agreement since last year. Now apparently at an impasse, Sharp has chosen hardball as their next negotiating tactic. I would expect Samsung to settle quietly before the end of the year.

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