Technology/Business NotesAs Sales Slip, TV Makers Strain for the Next Sensation
By Brian X. Chen, The New York Times
- Jan. 7, 2013
LAS VEGAS — Your smartphone is the screen in your pocket. Your computer is the screen on your desk. Your tablet is a screen for the couch.
Almost every major electronic device you own is a black rectangle that is brought to life by software and content. So how can hardware companies make their products stand out in a sea of black rectangles?
That challenge will be on display at the Las Vegas Convention Center on Tuesday through Friday at the 46th annual Consumer Electronics Show, one of the largest technology conventions based on attendance, which is expected to exceed 150,000 this year. And one that is particularly acute for television makers. “The hardware is no longer what’s driving the future,” said James L. McQuivey, an analyst for Forrester Research. “The hardware is kind of boring.”
More exciting things are happening in software, Mr. McQuivey said. For example, dozens of tablets are on the market, but Apple and Amazon lead the pack because of the impressive apps and digital content available for their devices, he said.
This year, television makers like Samsung, Sony, LG and Panasonic are trying to grab attention by supersizing their television screens and quadrupling the level of detail in their images. And manufacturers continue to push the idea of “smart” sets by adding apps and other interactive elements.
For the electronics industry, the television is an important but increasingly difficult product to sell. Just seven years ago, big-screen sets that cost thousands of dollars were major profit generators. But more recently, even as televisions have gotten bigger and better looking, they have dropped significantly in price amid heated competition.
To make matters worse, consumers are buying new televisions as often as they buy a new car, not as often as a new computer or phone. And people can now watch video on smartphones, tablets and computers, reducing the need to buy a television at all.
Sales of televisions over the holiday season were down 2 percent from the previous year, according to Stephen Baker, an analyst for the NPD Group. Mr. Baker said one problem for television makers was that bigger screens, ranging from 50 inches to 55 inches were taking sales from televisions in the 40- to 49-inch range, once an especially popular category.
The average selling price of a 45- or 49-inch set was $615, but sets in the range of 50 to 54 inches actually had a lower average price, $520, Mr. Baker said. This is because people who bought the smaller televisions opted for features like LED screen technology and Internet capability, but more budget-conscious consumers chose size over other features.
As they try to prop up profits, electronics makers are trying hard to establish a new high-end category of televisions. They are promoting what they call Ultra High-Definition televisions, which have four times as many pixels as their high-definition predecessors. Some of these new televisions can cost as much as a car, like Sony’s 84-inch Ultra HDTV, which is priced at $25,000. But Sony says it will unveil Ultra HDTVs at the show that are smaller and less expensive.
Mike Lucas, a senior vice president at Sony, called its 84-inch set the Ferrari of televisions. But he said that with the new versions, “we’re moving out from the Ferrari world and more into the Audi, Lexus and Mercedes side of the world.” He declined to say how much the smaller Ultra HD sets would cost, but said they would be more expensive than the older HDTVs.
Samsung will also introduce new televisions this week, including an Ultra HDTV that emphasizes software. Joe Stinziano, senior vice president for home entertainment at Samsung Electronics America, said a majority of the new Samsung sets this year would be smart televisions — Internet-enabled televisions that run apps for things like Netflix and Facebook.
“The television has always been the center of the entertainment of the home,” Mr. Stinziano said. “Now it will be the center of a connected home.”
Raymond Soneira, president of DisplayMate Technologies, a consulting firm that studies displays, said he was not enthusiastic about the new higher resolution sets. Mr. Soneira said Ultra HD would make a difference only on screens that were at least 80 inches, measured diagonally. For smaller screens, the extra pixels would not be visible to a person with 20/20 vision viewing from a normal distance of at least 7.2 feet, he said.
“It’s a bit of a marketing push,” Mr. Soneira said. “It’s really pointless for a small TV under typical viewing conditions.”
Mr. McQuivey of Forrester agreed, adding that very little content is available that takes advantage of the Ultra HD format. In the last two years, television makers have tried a similar push with 3-D sets, but consumers decided that the ability to watch a handful of movies in 3-D did not justify spending thousands of dollars on a new television. He predicted that Ultra HD TVs would also be a flop.
Industry officials cited reasons for more optimism. Gary Shapiro, chief executive of the Consumer Electronics Association, which puts on the electronics show, said he once predicted that high-definition television would fail because of the lack of HD content available at the time. But it turned out that early adopters were buying the sets because they made DVDs look better.
“With Ultra HD, you’re going to see people stepping up, too, and you’ll see at the show it’s going to be a big deal,” Mr. Shapiro said.
Mr. Lucas of Sony said its Ultra HD TVs would use software to pump up the number of pixels in videos to make them look as if they were shot at a higher resolution.
But Mr. Soneira said that this approach, called “upconverting,” cannot add details that were not in the original image, and would not make a difference on screens smaller than 80 inches.
Apple, the technology industry’s most profitable hardware maker, does not attend trade shows, including the Consumer Electronics Show, because it can easily reach customers through its retail stores. But it is always on competitors’ minds. Rumors have been swirling for years that Apple would make its own television, and many analysts expect it to introduce one this year.
Mr. McQuivey of Forrester has been writing for some time about what Apple should do with a television. He said Apple should ignore the Ultra HD game and make the first “non-TV TV.”
He imagined a 32-inch screen that can be controlled with touch and voice commands, hung on the wall of a room where a family would get together to talk or eat. Apple could push software developers to make apps that serve as the hub of family life, to supplement the built-in shared calendars, photos and video chats with Grandma, he said.
“Apple needs to create a new experience for the television, not a new dimension of hardware,” Mr. McQuivey said. “That’s part of what has to change in the long run.”http://www.nytimes.com/2013/01/07/technology/07iht-ces07.html?ref=technology