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Goldstuck on Gadgets

Gadget war moves into the lounge

Sony, LG and Samsung all stole the show at the International CES last week with TV sets that, once again, raised the stakes in both technology and marketing, writes ARTHUR GOLDSTUCK.

The war for domination of consumer electronics has shifted from the handheld portable gadget to a device that is firmly ensconced in the living room.

At last week’s International Consumer Electronics Show (CES), the launchpad for the industry that owns Las Vegas in January every year, smartphones took a backseat. One dazzling TV set after another was unveiled to oohs and aahs and aarghs from those who had just bought the previous state of the art version.

There was little to choose between the flagship screens of the world’s TV giants, with the big three, Samsung, LG and Sony, all unveiling versions of the new Ultra High-definition (UHD) 4K standard sets with double the resolution of High-definition TV.

Sony stole a march on its rivals, however, with the world’s first 4K TV using OLED (Organic Light-emitting Diode). Samsung, for its part, put out a 3D OLED TV.

While OLED is becoming common on cellphone screens, its high cost of materials and production had kept it from big screens. Now, it seems, the stakes are high enough for TV manufacturers to ignore the fact that the devices are priced out of reach of the market. The desperate shortage of tailor-made content is glossed over. In this battle, mindshare is as important to manufacturers as market share. Being first with any size, format or innovation is a goal in its own right.

Why are bragging rights so important? The real issue with high-end TV is that the manufacturer only has one shot at winning over the consumer. Unlike smartphones, which are typically replaced every two years, the TV set has a lounge life of five to 10 years. Once the purchase has been made, the losing brand may not have another chance to win over the customer for up to a decade.

With smartphones, they can recover from mistakes: they can survive having to play catch-up: and they can win back lost customers with the next roll of the dice. When they lose a TV customer, on the other hand, there is rarely a second chance in the product future that is currently mapped out.

As a result, convincing customers to go with a specific brand is as important as giving them what they want from the device. Being positioned as a technology leader is a key part of that convincing.

Enter 4K. The first 4K sets unveiled a few months ago by Sony and LG on the same day in South Africa respectively cost R279 000 and R160 000. That meant a market of perhaps a few dozen customers. But anyone seeing either of the sets in action on shop floors would have been convinced that the manufacturer had entered the future of TV. Despite the technology not yet being built into lower-end devices, the perception of technology leadership would still provide a halo effect over these sets.

For Sony, the stakes are high. Speaking to South African media at CES this week, Sony senior vice president Masashi Tiger Imamura acknowledged that the company was on a mission to turn around the loss-making TV business.

‚”The most important thing to us was to make a very attractive product for the market,‚” he said of the 4K OLED set. However, it was also important to understand how the TV had evolved in the way it was used.

‚”TV used to be a very passive device. Now it has become both a passive and active device. TV is not a standalone product anymore.‚”

Every one of the major manufacturers also unveiled more advanced versions of the content services available on their Internet-connected TVs, with the Samsung and Panasonic screens at CES displaying remarkably similar interfaces for accessing Web-based content. Increasingly in the future, we can expect to see TV makers attempt to differentiate their devices based on innovative content services.

Imamura does not believe, however, that competition for higher picture quality has ended, or that content is the only way to differentiate.

‚”I believe there is still a lot of room to improve picture quality with new technology like OLED. The issues are always around the customer getting real value, how much they will pay, and what kind of volume we can sell. It’s a balance between demand and supply and technological advance.‚”

As a result, he said, 4K represented both a risk and a challenge to Sony.

The excitement it created at CES suggests that, from a marketing point of view, the risk has paid off.

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