Explore Technology Certificate Programs That Fit Your Needs /// Click here to learn more.
Welcome Guest | Sign In
LinuxInsider.com

Consumers Tuning Out OLED in 2013

Consumers Tuning Out OLED in 2013

"OLED has super thinness and energy savings," said the NPD Group's Ben Arnold. "All that stuff is great for journalists and analysts to talk about. But consumers going to retail [stores] aren't going to care as much. What is impactful is how the set's picture looks." OLED's superior contrast probably is not enough to get the consumer on a budget to break the bank to buy it -- and the thin factor only goes so far.

By Peter Suciu TechNewsWorld ECT News Network
01/08/13 5:00 AM PT

The 2013 International CES is in full swing, and it's easy to get caught up in all the hoopla over the latest and greatest tech gizmos on display. However, this is a cycle that repeats itself annually, and what's hot in Vegas this week may cool down faster than you can say "OLED."

A year ago, OLED (organic light emitting diode) -- the latest development in LED technology -- was the eye-catching, head turning TV innovation that was all the rage at CES. It promised sets that were thinner, lighter and brighter.

LG OLED TV
LG OLED TV

Several companies, including the two largest producers of HDTV sets, South Korea-based Samung and LG, were on board to roll out ultra-thin OLED models, which were set to arrive with ultra-high prices.

That was then, this is now. OLED doesn't appear to have much star power at CES this year, and its future seems to have dimmed. In October, Samsung announced it was pushing back its release of OLED panels until the new year. In December, reports circulated that both Samsung and LG were considering shelving the technology for the near future.

LG decided to move forward, with its first OLED model scheduled to ship in South Korea in February. It will debut in the U.S. in March, with sets selling for around US$12,000.

Despite LG's news, OLED volumes are expected to be low, while prices are expected to be very high, NPD Group DisplaySearch noted in a recent forecast.

Consumers Tuning Out

With fiscal cliff worries, a continuing sluggish economy, and falling prices on current sets, it wasn't hard to see that trying to market a new TV technology was going to be a hard sell at the end of 2012. Many HDTV sets in reasonably large sizes -- 50-inches and greater -- were selling for $1,000 or less in the lead-up to the holiday season. It seemed apparent that the prospect of OLED in the wings wasn't attractive enough to induce consumers to wait.

"That is a pretty reasonable take on the state of the display market," said Ben Arnold, director of industry analysis at the NPD Group. "Consumers process this stuff at a fairly basic level."

The biggest selling point of OLED TVs today is their thinness. They're often just an inch or so, compared to the three or so inches of most rival plasma and LCD technologies.

OLED's Other Advantages

The thin factor isn't the only advantage of OLED, but the other things it offers aren't likely to convince consumers to spend upwards of $10,000.

"We can talk about lighting and resolution, but consumers make up their mind on what TV is best for them based on a few criteria: size, brand and which looks the best to them in the store. That guides the preference more than anything," Arnold told TechNewsWorld.

"OLED has super thinness and energy savings," added Arnold. "All that stuff is great for journalists and analysts to talk about. But consumers going to retail [stores] aren't going to care as much. What is impactful is how the set's picture looks."

OLED does have superior contrast over competing technologies, but again, probably not enough to get the consumer on a budget to break the bank to buy it -- and the thin factor only goes so far.

"There is a point where it doesn't really matter," Arnold emphasized. "I don't know if we are at that threshold or not."

OLED's Technology Troubles

The OLED technology will not be able to fall in price as quickly as competing technologies -- notably plasma or even LED -- simply because it is a hard panel to produce.

OLED technology has a serious production flaw that results in just 10 percent of large panels -- 50 inches and greater -- passing tests during manufacturing. Even after repairs and electronic tweaks, this number is only increased to 30 percent of panels that make it into finished TV sets.

This could be one reason the two largest TV manufacturers -- the format's largest supporters so far -- could be having second thoughts, at least when it comes to TVs.

"Samsung and LG have jumped ship on OLED," said Chris Boylan, editor of Big Picture Big Sound.

"Samsung has a huge AMOLED business for smaller screens -- phones and tablets -- which could still translate into larger screen sizes, but problems with the yield or success rate of larger OLED panels using the current OLED fabrication techniques are plaguing both manufacturers," he explained.

"They're not getting as many usable panels as they would like out of each batch, which raises the overall costs," Boylan told TechNewsWorld. "The picture quality benefits of OLED over LED/LCD technology -- and even plasma -- are significant, but the costs are currently so much higher than LED/LCD and plasma sets that it just isn't cost-effective to release OLED TVs given the current market conditions."

That doesn't mean either is out of the game yet.

Japanese Resurgence

However, the future of OLED could depend not on the Korean TV makers, but on their Japanese rivals. Many Japanese companies are looking for a way to take back their long-held dominance in the TV market.

"There are alternative printing-based manufacturing methods to make OLED panels which could make OLED TV production not only viable, but cheaper by an order of magnitude from the current process," added Boylan.

"Panasonic and Sony recently partnered on OLED manufacturing R&D," he noted.

"There is an outside chance that the Japanese manufacturers may make breakthroughs that would allow them to leapfrog past the Koreans in large screen OLED technology, but this is a really big 'if,'" Boylan said. "CES 2013 may be too early for the manufacturers to be able to show anything along these lines."

Rival Technologies Could Delay OLED

The other problem is that a year ago, OLED was on the forefront of being the "next big thing," but now rival technologies are capturing interest. One in particular is standing out, and that is 4K -- recently dubbed "Ultra HD."

At present the two technologies exist in parallel development.

"OLED and 4K TVs both have advantages over current technologies," said Tom Morrod, senior principal analyst of TV systems and technology at IHS iSuppli. "Makers of those will have opportunities to make revenue over current technologies."

However the two technologies are not compatible. The Ultra HD sets offer the promise of much greater resolution than current HDTV. With four times the pixels, these sets could usher in even larger sets, but given that OLED's makers have had a hard enough time developing 50- to 65-inch panels, going even bigger is only going to exacerbate the problem. Still, OLED's thinner sets could be the future of 4K/Ultra HD in the long term.

"At present, these two technologies are not compatible," said Arnold, "but the two technologies will be in parallel development for the next five or six years and could eventually come together."

In other words, the future could be an Ultra HD OLED set, but it will require a little -- or perhaps more -- patience. Perhaps it will be something for the 2016 International CES.


Peter Suciu is a freelance writer who has covered consumer electronics, technology, electronic entertainment and fitness-related trends for more than a decade. His work has appeared in more than three dozen publications, and he is the co-author of Careers in the Computer Game Industry (Career in the New Economy series), a career guide aimed at high school students from Rosen Publishing.


Facebook Twitter LinkedIn Google+ RSS
Tech News Alerts from ECT News Network