December 25, 2013 2:00 am JST

Technical difficulties foil Sony-Panasonic OLED effort

SHUNSUKE TABETA, Nikkei staff writer

Sony shows off a prototype OLED TV at the Consumer Electronics Show in January.

TOKYO -- With steep technical hurdles still standing in the way of commercial production, Sony and Panasonic have decided to break off their OLED TV tie-up and focus instead on high-demand 4K technology.

     The partnership, arranged in June of last year, involved developing mass-production methods for panels consisting of organic light-emitting diodes, a key component of the TVs.

     The two companies had planned to combine Panasonic's production method, which involves printing organic material onto a substrate, with Sony's OLED technology. They aimed to establish a technological base for mass production in 2013, potentially working together on manufacturing thereafter.

     But they were unable to make the panels durable enough, nor to cut production costs. The electronics firms decided not to renew their tie-up contract when it expires at the end of the year, and will instead pursue development independently.

     The move also likely reflects uncertainty in the OLED market, as South Korean pioneers LG Electronics and Samsung Electronics struggle with sales. Both companies rolled out 55-inch OLED TVs this year in South Korea and North America, but initial price tags of $10,000 and up kept sales low and business in the red.

      U.S. research firm NPD DisplaySearch downgraded its global shipment estimates for OLED TVs on Tuesday, cutting this year's figure to 5,000 from 20,000 and 2017's forecast to 4 million from 9 million.

     Meanwhile, 4K TVs, which boast four times the resolution of high-definition displays, are rapidly taking off, with 1.95 million units shipped this year, according to DisplaySearch. The firm expects this figure to reach 60.65 million by 2017, accounting for more than 20% of all LCD TVs.

     Sony and Panasonic are restructuring their underperforming TV businesses through such measures as slimming down lineups of low-cost products. They likely considered OLED commercialization too great a risk for the time being -- a decision that may give the market for the fledgling technology further trouble getting off the ground.