Consumers lusting after giant TVs have created a big business for Texas Instruments. Now TI and its manufacturing partners find themselves...
DALLAS — Consumers lusting after giant TVs have created a big business for Texas Instruments. Now TI and its manufacturing partners find themselves defending their turf.
TI’s digital-light-processor (DLP) technology has, in a short time, become one of the most popular options for big-screen-TV buyers.
But a rival technology won hearts in the holiday season, and DLP manufacturers now have to regain momentum.
Television shoppers could ultimately benefit as manufacturers jockey for the most consumer-friendly mix of price, screen size and picture quality.
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In the holiday season, Sony attracted attention with prices and models of TVs that, like DLP models, aren’t as thin as plasma displays but offer large screens and crisp pictures.
“They came in like gangbusters,” said Steve Panosian, a senior marketing manager at Samsung Electronics, a maker of DLP TVs.
Sales of the Sony TVs took off in the fourth quarter, while some DLP manufacturers had an unexpected glut of inventory left over at the holiday season’s end.
Dallas-based TI and the DLP-TV makers plan to answer the challenge with price cuts and other moves of their own.
The television category that includes DLP sets “has to be very price-sensitive,” said Tamaryn Pratt, a principal at Quixel Research, which studies the advanced-TV market. “It has to be ready to move.”
DLP sets are types of rear-projection televisions that project an image from inside the TV to fill the screen similar to the way traditional cathode-ray TVs do. A DLP chip creates an image by reflecting light off tiny mirrors on the surface of the chip.
Sony’s rear-projection TVs, meanwhile, use three liquid-crystal-display chips, or LCDs, that combine three colors to produce an image. Sony also makes flat-panel TVs using LCD technology.
DLP televisions were a tiny minority five years ago. But TI has forged partnerships with Samsung and other manufacturers to lift the technology’s profile.
Last year’s holiday season, however, was a bump in the road for TI and its allies. The market share of DLP TVs dipped to 39 percent in the fourth quarter from 53 percent in the third quarter, according to Quixel, which measures the market in units sold.
Rear-projection LCD televisions, such as the ones Sony make, increased their market share to 57 percent from 43 percent in the same period.
TI has said that DLP TVs gained market share in the fourth quarter. That could be true despite Quixel’s numbers. Different research firms measure the market differently and divide it into different categories of technology.
Indeed, the NPD Group said DLP held 28.2 percent of rear-projection sales in the fourth quarter, compared with 28 percent in the third quarter.
TI did confirm, though, that Sony had made big gains in the quarter. It’s difficult to conclude whether Sony’s inroads came at the expense of DLP or of other types of technology, TI spokeswoman Molly Mulloy said.
How did Sony make its gains? Its biggest move in the fourth quarter was to get smaller.
The company offered a model whose screen measures 42 inches diagonally, a shade below the 44-inch and 46-inch models of other DLP manufacturers. With that smaller size, Sony also offered a competitive price — just under $2,500.
With retailers’ discounts, that meant Sony was offering a slightly smaller TV than Samsung’s smallest model — a 46-incher — for hundreds of dollars less. Some DLP makers, such as Toshiba and LG Electronics, had models closer in size and price to Sony’s, but it was Sony that struck the biggest chord with consumers.
Price not only factor
Sony said its success wasn’t just a matter of price. Consumers admire the company’s history of fashionable, high-tech products, and they embraced the sophistication and design of its rear-projection LCD sets, said Greg Gudorf, a senior vice president at Sony.
With its 42-inch display at $2,499 and its 50-inch display at $2,999, Sony was offering prices about 10 percent less than those of comparable models a year before. Models measuring 55 inches and 60 inches did well in the fourth quarter, too, Gudorf said.
He credited increasing demand for televisions capable of displaying high-definition pictures. That led consumers to Sony’s technology, Gudorf said.
TI and the DLP manufacturers say their picture quality is superior. Technology enthusiasts have endlessly debated which technology produces the best image.
Consumers, meanwhile, care about picture quality but also are interested in the brand, price and fashion, said Pratt, of Quixel Research.
“You can’t take the brand by itself, the price, the picture, the technology,” she said. “They’re all in there together.”
With that in mind, it’s reasonable to expect DLP manufacturers to work to lower their prices to attract consumers.
Manufacturers see the days of high-quality rear-projection TVs retailing under $2,000 and measuring more than 50 inches as just around the corner.
“It’s a race for value,” Samsung’s Panosian said.