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TV makers try new tricks to restore market’s prices

An LG 3D video wall at SID Display Week. TV makers have tried spurring sales and boosting prices with new technology.

DAVID L. RYAN/GLOBE STAFF

An LG 3D video wall at SID Display Week. TV makers have tried spurring sales and boosting prices with new technology.

A radical new television set, designed to end the eternal battle for the remote control, was shown in Boston Tuesday.

The flat-panel TV, presented at SID Display Week, an industry trade show for electronic screen makers at the Boston Convention & Exhibition Center, allows two people wearing special glasses to watch different programs on the same screen.

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It’s an eye-catching innovation for an industry that badly needs one.

The world’s major makers of flat video panels are being hammered by slow sales and a supply glut that has led to huge losses for major screen manufacturers such as South Korea’s Samsung Corp., maker of the dual view TV.

“All of the top panel makers have been losing money for at least six quarters,” said Sweta Dash, a senior director at the technology market research firm IHS iSuppli in El Segundo, Calif.

The problem is price, analysts said. Thanks to a glut of flat TV panels, sets that once cost thousands of dollars now sell for hundreds. That may be good for consumers, but it’s disastrous for giant panel makers like Samsung, South Korean rival LG Electronics, and Japan’s Sharp Corp.

As TV viewers switched from obsolete picture-tube TVs to flat panel sets, those companies built huge, highly efficient factories to make millions of panels a year for themselves and other manufacturers. But television sales flattened during the 2008 economic collapse, taking those panel makers by surprise, according to analyst Paul Semenza of NPD DisplaySearch of Santa Clara, Calif. The manufacturers don’t want to lose market share to rivals by cutting back their output, he said, so “the guys who make these big panels sell them for less than it costs to make them.”

‘All of the top panel makers have been losing money for at least six quarters.’

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The result is a dramatic drop in retail prices. The average TV set sold for $832 in 2008, $644 in 2009, and only $545 last year.

Even though consumers are buying about the same number of TV sets — about 34 million a year since 2009 — they are paying less. Americans spent $18.4 billion on new TV sets in 2011, down from nearly $26 billion in 2008, according to the Consumer Electronics Association.

TV makers have tried spurring sales and boosting prices with new technology, notably by introducing 3D sets in recent years. But most consumers just shrugged. “The manufacturers thought it was going to be a new kind of product,” Semenza said. “In reality, it’s just a feature.”

Now, companies like Samsung and LG are placing their bets on another next-generation screen technology: organic light-emitting diode, or OLED displays, which offer richer colors and pictures with much better contrast. Both companies came to Boston this week with 55-inch OLED televisions that are expected to go on sale later this year.

Manufacturers think that in the long run, OLED sets will be cheaper to make than today’s liquid crystal or LCD sets, said Semenza. They hope the new technology will attract a surge of new buyers, just as people flocked to replace their old-fashioned picture tube sets with the first affordable flat panels. “I think it is an open question whether that will work,” he said.

That’s because OLED sets will be very expensive for years to come. Samsung last month said the sets will cost about $9,000 when they go on sale in South Korea later this year. They won’t get cheaper until they’re produced by the millions, but with a huge oversupply of LCD panels on the market already, that could take quite a while. Although IHS’s Dash has heard predictions that OLED sets will be as cheap as other television sets in three years, she expects it to take at least twice that long. “The cost is still a big challenge,” she said.

There’s little disagreement that OLED technology has major advantages over the LCD and plasma technologies used in most of today’s flat screens. Beyond the richer colors, OLED screens are self-illuminating — unlike LCD screens, which need a bulky backlighting system to illuminate them from behind. As a result, OLED TV sets are less than an inch thick.

A Samsung official said that OLED can switch between different images extremely fast — which made it practical to develop the sets that can show two programs at once. The dual viewing system requires special glasses, similar to those used with 3D televisions. But in this case, the glasses isolate one of two different video streams running simultaneously. A pushbutton allowed the viewer to switch between shows; speakers in the earpieces of the glasses deliver the audio track.

Such technology won’t rescue the flat panel makers, according to Semenza. The real problem is a glut of cheap LCDs, he said, and only substantial production cuts will help panel makers turn a profit.

“If something is unsustainable,” Semenza said, “it has to stop.”

Hiawatha Bray can be reached at bray@globe.com.
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