beyondbrics

Over the past decade, technological advancements have made televisions thinner and thinner, with giant cathode ray tube sets replaced by flatscreen TVs whose thickness are now measured in millimeters.

Starting next year, however, ‘fatter’ flatscreen TVs may be making a comeback in emerging markets, according to one screen maker.

AU Optronics, the Taiwanese flat panel maker is the fourth-biggest in the world and supplies top international brands such as Sony and Panasonic as well as a host of domestic Chinese brands. Paul Peng, executive vice president at AUO, said on Tuesday that he was noticing for the first time that some of AUO’s customers were deliberately designing thicker television sets that are meant to be sold cheaply in emerging markets.

These new models reflect how badly the global TV industry has been hit by the economic downturn in Europe and the US, its traditional markets. AU Optronics posted a third-quarter loss of T$15.8bn on Tuesday, compared with a net profit of T$227m a year earlier. Sony in July cut its profit forecast by a quarter largely because of weak TV sales, and many Japanese TV brands are now considering abandoning TV manufacturing entirely.

Peng says he sees “no sign of recovery in panel prices through the first quarter of next year”. Demand is slowing even in China, which had helped pick up the slack in terms of sales in the two years after the financial crisis, because government subsidy programmes are coming to an end.

This has driven many TV makers to turn to other emerging markets, and that is where the ‘fat’ flat TVs come in.

Of course, these TVs are ‘fat’ only relative to the current standard. The sets are roughly 4cm thick. “That’s the standard 3 years ago, compared to 1cm for the current generation of TVs,” Peng said.

That 3cm difference, may seems small, but in fact translates into a huge reduction in costs. “In order to make televisions that are thin and light, you have to follow very rigorous specifications [for all the parts],” he said. Freed of such design restrictions, “by next year you could see ‘fat’ flatscreen televisions sell for almost the same price as [old cathode] televisions,” he said.

Cathode ray televisions have all but disappeared from the mature US and European markets, but there are still millions of such TV sets in emerging markets around the world. Peng said these new flatscreen TVs are squarely aimed at encouraging such households to trade in their bulky CRT set for an affordable new flatscreen.

“For mature market customers they will seem very bulky but if you are still using a CRT TV at home then it is a clear upgrade. That has appeal in India, China, and other emerging markets in Southeast Asia,” he said.

Related reading:
Japan ponders pulling the plug on TVs, FT
Sony cuts profit forecast by 25%, FT
Singapore: electronics exports plunge, beyondbrics
Panasonic adapts to Indian tastes, beyondbrics