Sony, Panasonic Discussing OLED TV Tie-Up, Official Says

Sony Corp. (6758) and Panasonic Corp. (6752), Japan’s biggest makers of televisions, are discussing a possible collaboration on making sets that use new OLED technology, an official at one of the companies said.

The two companies have held preliminary talks on a potential tie-up to make TVs with organic light-emitting diode displays, the official said, declining to be named because the discussions are private.

A partnership may be key for the two companies, which reported profit forecasts last week that missed analyst estimates because of losses from selling TVs, as they try to catch up with Samsung Electronics Co. and LG Electronics Inc. (066570) The South Korean companies, the world’s two biggest TV makers, earn a profit from selling sets while Sony and Panasonic are restructuring by eliminating jobs and seeking partners.

“A tie-up would lower their development costs for OLED TVs and enable them to gain ground on the industry-leading South Korean manufacturers,” said Yuji Fujimori, an analyst for Barclays Capital in Tokyo. “Investors could also see this as an indication of how these companies are changing under new management.”

Samsung, LG

Sony Chief Executive Officer Kazuo Hirai said April 12 the maker of Bravia TVs may seek a partner making sets using the thinner display technology. Sony and Panasonic haven’t set target dates for introducing OLED models while Samsung and LG plan to offer 55-inch OLED sets as early as this year.

Photographer: Itsuo Inouye via AP Photo

A clear flower image is shown on a screen of a Sony Corp.'s 21-inch organic light-emitting diode (OLED) display model, measuring just 3 millimeters (0.12 inches) thick, displayed in Japan. Close

A clear flower image is shown on a screen of a Sony Corp.'s 21-inch organic... Read More

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Photographer: Itsuo Inouye via AP Photo

A clear flower image is shown on a screen of a Sony Corp.'s 21-inch organic light-emitting diode (OLED) display model, measuring just 3 millimeters (0.12 inches) thick, displayed in Japan.

Seoul-based LG will sell the sets in South Korea first for about 10 million won ($9,000), Jang Moon Ik, a director of the TV business, said today.

Sony shares fell 2.3 percent to 1,128 yen in Tokyo today, the lowest level since August 1980. Panasonic declined 3.1 percent to 560 yen, the lowest level since January 1978.

OLED televisions are as thin as 4 millimeters (0.16 inches) and produce sharper images than current liquid-crystal-display models. Shipments of OLED TVs may grow to 2.1 million sets in 2015 from 34,000 in 2012, according to Englewood, Colorado-based IHS Inc. (IHS)’s iSuppli.

Sony, which introduced the first OLED TV with an 11-inch screen in 2007, is studying the demand for larger sets, Hirai said in February.

Panasonic President Fumio Ohtsubo said last week the maker of Viera TVs may seek a partner to save development costs in OLED sets. Ohtsubo said in January that Panasonic wants to introduce OLED sets “not long after” Samsung and LG.

Sony and Panasonic are discussing a partnership to cut development time of OLED sets, the Nikkei newspaper reported today, without saying where it got the information.

George Boyd, a spokesman for Tokyo-based Sony, and Yuko Hosaka, a spokeswoman for Osaka-based Panasonic, declined to comment.

“The pace of commoditization of TVs is very high,” said Mitsushige Akino, chief fund manager of Ichiyoshi Investment Management Co., in Tokyo. “I’m not sure whether Sony and Panasonic can make a profit even if they have an alliance.”

To contact the reporters on this story: Mariko Yasu in Tokyo at myasu@bloomberg.net; Shunichi Ozasa in Tokyo at sozasa@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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