In a recent post, I talked about Panasonic’s impressive financial turnaround from its last fiscal year, booking a nice profit after doing some soul-searching and consequent house-cleaning of underperforming business units. And I contrasted Panasonic’s performance with the struggles of Sony, who continues to struggle with red ink. Let’s take a few moments to revisit both brands.
Coincidentally, Panasonic held a couple of press days this week in New York City to talk about its 2014 TV lineup. I attended the Thursday session and can say that it was much more low-key than previous Panasonic TV events.
For 2014, the emphasis was on two things – 4K, and cloud connectivity. Panasonic introduced a new concept, LifeScreen, which is yet another search engine combined with a clever graphical user interface. You pre-set your preferences, and your Panasonic TV searches for content to match them.
And how, exactly, does the TV know it’s you? Thanks to a pop-up camera and face recognition software, the TV comes to life when you stand or sit in front of it and loads up your programs choices. A new remote control provides both swipe control and voice recognition (shades of Samsung 2011!), and seems to work reliably.
Panasonic’s cloud structure isn’t much different than other manufacturers. You can download photos and video and share them with connected tablets and phones in your house. And you can upload your own photos and videos to the same online storage.
Now, to the nitty-gritty. As expected, the 2014 TV lineup is 100% LCD. What’s unexpected, but ultimately not surprising, is that you’ll find a mix of IPS and PVA LCD panels in these new TVs, meaning that Panasonic (like everyone else) is shopping for the best price and performance combination in LCD panels for their new TVs.
Given the cutthroat pricing in the TV market, this isn’t surprising and in fact is a smart strategy: There’s plenty of good LCD glass coming out of Korean, Taiwanese, and Chinese fabs, so why bother with the costs of making it yourself?
Panasonic’s value-add for these TVs is to improve the spectral response of the white LEDs used in these new sets, and it’s impressive. They’re claiming 98% coverage of the minimum DCI color space and have improved the rendering of yellow.
Side-by-side demos with last year’s award-winning ZT60 plasma TV showed the difference dramatically. Aside from the usual issues with PVA and IPS LCD panels, the images had excellent contrast, great color saturation, and decent black levels – and you can clearly see why plasma has fallen by the wayside.
There will be six series of models in the 2014 TV line-up, starting with the entry-level A400 and moving all the way up to the new 55-inch and 65-inch Ultra HD AX800-series TVs. The new remote and camera system come with three of these lines, and some models now include a sound bar (smart move!) in the box.
HDMI 2.0 and HEVC decoding are standard on the AX800, which is interesting considering how few Broadcom HEVC decoder chips have been deployed by TV manufacturers to date. And you can operate the TV from your iPhone or iPad (or Android device), even to the point of doing a full color and grayscale calibration, thanks to a new app.
So Panasonic remains a player in the TV game, even though the company’s worldwide market share fell out of the top five in 2013. Panasonic’s return to corporate profitability will take a lot of pressure off the TV division, which has relocated to San Diego from New Jersey.
In contrast, Panasonic’s neighbor down the street in San Diego – Sony – continues to struggle with red ink. The company released its final numbers for fiscal year 2013 last Thursday, and things still don’t look good, even though the picture is lightening up a bit.
For 2013, Sony booked a net loss of -¥125B (about $1.23B USD) with operating income of ¥26.5B (about $265M USD). There were a couple of operating divisions that continue to drag down profit, most notably Sony’s discontinued PC business unit, battery manufacturing, and disc manufacturing (DVD, Blu-ray) outside Japan and the U.S.
Sony’s long-struggling TV operations are reported as part of the company’s Home Entertainment and Sound business unit, which recorded a loss of -$248M for FY 2013. That’s actually a 70% reduction from FY 2012, which is a silver lining. Overall, the TV division saw its sales increase 30% Y-Y, which is more good news.
Another bright spot for Sony is its Imaging Products and Solutions (IP&S) division, which booked $256M in operating income. That’s not enough, however, to offset the -$729M operating loss from PC operations and the -$78M loss from the Game division. And an impairment charge of -$250M was assigned to the disc manufacturing business, adding more red ink.
Getting rid of the unprofitable PC business will definitely help next year’s results. (Apparently, so will the sale of Sony’s New York City headquarters on Madison Avenue, which netted almost $700M, according to the company’s financial statement.) The operating loss reported for the Game division (-$78M) was a surprise, but Sony attributed it to costs involved in launching the PlayStation 4 console and a $60M write-off of PC game software titles.
There’s no question that Sony has quite a mountain to climb and get back on the “plus” side of the ledger. Unlike Panasonic, Sony’s worldwide share of television shipments held pretty steadily in 2013 (about 7%, down slightly from 2012), but that number either has to go up or further cost-cutting must take place to make TV retailing worth continuing.
Sony also has to make a decision about its optical disc business unit. The Blu-ray Disc Association (BDA) hasn’t released a standard for 4K yet, while the Digital Entertainment Group’s numbers have shown pretty consistently over the past four years that digital media consumption is shifting emphatically to digital downloads and streaming. Given this trend, it’s not likely that the disc manufacturing unit will ever return to profitability and might also be a candidate for the axe by year’s end.
You know that old saying about the best-laid plans oft going astray? Hmmm…
Posted by Pete Putman, May 16, 2014 1:22 PM
About Pete PutmanPeter Putman is the president of ROAM Consulting L.L.C. His company provides training, marketing communications, and product testing/development services to manufacturers, dealers, and end-users of displays, display interfaces, and related products.
Pete edits and publishes HDTVexpert.com, a Web blog focused on digital TV, HDTV, and display technologies. He is also a columnist for Pro AV magazine, the leading trade publication for commercial AV systems integrators.