TV Screens Face A Dazzling New Rival

SED displays rival plasma and LCDs, but mass production may be a problem

In the TV industry, no debate is better rehearsed than the squabble over the relative merits of plasma and liquid-crystal displays. Both are flat, but plasma proponents tell you their technology is better for larger TVs, while LCD lovers say their screens offer higher-resolution and lower power consumption.

The debaters may have to come up with a new set of arguments. By yearend, SED Inc., a joint venture between Canon Inc. (CAJ ) and Toshiba Corp. (TOSBF ), will begin producing screens for a new kind of flat television. The companies say the technology -- called surface-conduction electron-emitter display, or SED for short -- offers better images than rival systems while consuming one-third the power used by plasma and about half that of LCDs. "We believe the partnership will be a big success," says Canon President Fujio Mitarai.

To prove it, Canon trots out a 36-inch prototype at its Hiratsuka plant near Tokyo. Dark colors appear richer than those on LCDs, while letters crossing the screen are far clearer than with plasma displays. The only place where SED appears less crisp than rivals is in brightly lit rooms -- the kind you might find at an electronics store. "In the living room, I don't think there will be a big difference," says Shunichi Uzawa, president of SED Inc.

With SEDs, the companies have combined the sharp resolution of traditional tube TVs with the size and weight of flat screens. While most experts say CRTs offer a better image than plasma or LCD, the picture tends to deteriorate toward the edge of the screen, and they look clunky next to sleek flat panels. CRTs use a single big picture tube that's almost as deep as it is high. SEDs, by contrast, give each pixel -- or dot of color -- its own tiny electron source, effectively creating thousands of CRTs. That means the screens can be just a few centimeters thick, and picture quality is as crisp at the corners as it is in the center. "The performance of SEDs is outstanding," says Hisakazu Torii, an analyst at market researcher DisplaySearch.


Yet for all of SED's apparent advantages, rival technologies don't yet have much to fear. For one thing, it will take Canon and Toshiba years to reach mass production. The companies won't get beyond 75,000 SED TVs a month before 2008 and are predicting 250,000 a month in 2010. By contrast, Matsushita Electric Industrial Co. (MC ) alone plans to produce 400,000 plasma TVs monthly by the end of 2006. "SED is an excellent technology, but there is a long way to go before it can be mass-produced," says Takeshi Uenoyama, director of Panasonic's Advanced Technology Research Laboratories.

Size problems and manufacturing costs may be bigger concerns. SED Inc. will initially produce panels for 50-inch TVs and expects to make 40-inch models sometime later. But making smaller screens means squeezing each pixel and its electron gun closer together, which adds complexity and cost. And TV prices are in free fall. DisplaySearch expects 50-inch plasma prices to tumble by 30% this year, while LCDs are dropping even faster. "I cannot see [SEDs] selling alongside existing plasma technology for the same price for the same screen size," says Paul O'Donovan, an analyst with researcher Gartner Dataquest.

SED Inc.'s Uzawa says SEDs will be "competitive" but admits that their introduction has been postponed as Canon and Toshiba have struggled to bring down production costs. Indeed, Canon has been working on SEDs since 1984. Satomi Ushioda, an analyst at Nikko Citigroup (C ) in Tokyo, predicts there could be further delays -- especially since the companies aren't willing to share the technology with other manufacturers, which could help lower costs. That might disappoint consumers with an eye for great pictures. But it would give plasma and LCD makers lots of time to hone new arguments before SED makes its debut.

By Ian Rowley in Hiratsuka, Japan

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