4th April, 2008
Death of Distinctive Flat-Panel TVs Greatly Exaggerated
Brent Butterworth
A recent announcement by Pioneer had some bloggers predicting a miserable future. They claim that the day is coming—and perhaps even upon us—when flat-panel TVs will be differentiated only by brand name. They see a future of Best Buys filled with the video equivalent of 1970s Chrysler K-Cars.
In some ways, their dire predictions are already true. But they’ve been true for at least 50 years.
These commentaries emerged in response to Pioneer’s recent announcement that it would outsource production of the panels in its award-winning Kuro plasma TVs to Matsushita, parent company of Panasonic. Pioneer says that while it will likely share with Matsushita some of the trade secrets that made its Kuros so good, it will retain much of the Kuro technology for itself. The panel, after all, is only one part of a flat-panel TV. There’s also a video processing section, a panel driver section, an input section, a filter screen, an ATSC tuner, etc., etc., etc. All of these components work together to deliver a certain level of performance. Contrary to what seems to be popular belief, no one component is totally or even primarily responsible for a flat-panel TV’s picture quality.
Some bloggers seem to be under the impression that Pioneer will simply “rebadge” Panasonic sets as its own, but that idea is at odds with Pioneer’s own statements and with basic business sense. Sure, Pioneer could produce a cheap TV, slap the Kuro name on it, and hope its brand name will help it take a chunk out of Samsung and Vizio. But the Kuro name is known and revered mostly by enthusiasts, who wouldn’t be fooled for long. And why would Pioneer abandon its product philosophy and marketing spin to try to catch Vizio in a race to the bottom? Vizio’s already won the race, grabbed the trophy, and headed off to Disneyland.
The truth is, Pioneer was an exception to what has been the rule for decades. TV companies—even behemoths like Samsung and LG—buy components and sometimes even completed sets from other companies whenever it makes good business sense. They routinely procure PDP and LCD panels from each other. And why not? Back in the day, they bought picture tubes from each other.
Sony is a great example. The company has always outsourced its large flat-panel displays, whether plasma or LCD. None of this means a Sony isn’t a Sony. That Sony TV that rolls off a Samsung production line differs substantially from Samsung’s product—it’s a Sony design with technology that’s exclusive to Sony. Sony’s upcoming joint venture with Sharp will undoubtedly result in Sharps and Sonys emerging from the same factory but bearing different designs, different features, and different technologies.
Sure, it’s possible to procure flat-panel TVs that possess nothing proprietary except their brand name, and some off-brand companies have followed that strategy. But none of the major players appear to be headed that way. Why would they? Anyone who’s ever worked in or studied marketing knows that differentiation is the key to survival for Panasonic, Philips, Pioneer, Samsung, Sharp, Sony, and every other name-brand TV company. Otherwise, their only weapons are price and distribution—and they probably can’t win that battle, because there’s always someone who’ll do things a penny cheaper.
The bloggers may be crushed to learn that the real world doesn’t conform to their fantasies, and that TV companies rarely build every major component of their products in-house. We hope for their sake that their tantrum will pass. Meanwhile, the rest of us can enjoy choosing from the greatest variety of video displays ever offered to mankind.
Posted at 1:52 pm |
