Analysis: Sony's 3D TV gambit likely to fail

Posted by Aharon Etengoff

San Francisco (CA) - Sony has pledged to lead the "commercialization" of 3D by introducing a 3D compatible BRAVIA LCD TV in 2010. Unfortunately, Sony's latest initiative is likely to fail spectacularly.

The shiny device will undoubtedly face the same challenges as Sony's early iterations of the Playstation 3, including higher manufacturing costs and lack of supported content. Sony may also discover that the saturated market isn't as susceptible to eye-candy as it once was.

Indeed, Wedbush Morgan analyst Edward Woo told TG Daily that the BRAVIA news was interesting, but "not that important."

"While the technology is interesting with 3D and putting more Bravia Link movie downloads sound interesting, in reality, most people don't know or care right now," opined Woo.

Analysis: Sony's 3D TV gambit likely to fail

In addition, Woo noted that Hollywood studios were unlikely to release BRAVIA-supported movies before they are made available on DVD.

"I doubt this will happen anytime soon (over the next two years). Studios are constantly testing out their digital strategies, but I only see movies released digitally no earlier than DVD release except for Sony movies," added Woo.

Woo also commented on Sony's recent sale of its Tijuana display manufacturing facility to Hon Hai/Foxconn.

"I think Sony has long term plans to build some displays, but only a small portion of them and not all of them. I think by keeping some manufacturing plants, they get to be quicker to market (and retain technological edge), but by not owning all their plants, they get some flexibility with investments and costs," said Woo.

"I think the current trend is to outsource while Sony is in [a] turnaround situation, but may slow when their performance improves. They hope to offload a lot of their fixed costs (factory and labor) into variable costs (cost per TV) so that when the industry is changing, they don't get saddled with all the costs."