Panasonic Cites Hurdles for 3-D Television

[B]TOKYO — Even as the electronics industry pushes televisions for watching three-dimensional videos as a future growth area, Panasonic Corp. acknowledged that it will be challenging to get consumers to upgrade to 3-D sets so soon after many purchased new flat-screen TVs.

The electronics company also said it is sourcing more components from places where the currency is tied to the U.S. dollar to offset the strength of the Japanese yen, which it said was putting the company at a disadvantage to rivals, particularly from South Korea.

Japanese electronics makers, along with South Korean rivals Samsung Electronics and LG Electronics Inc., see 3-D as the next major technological breakthrough to spur sales of televisions and Blu-ray players, similar to how high-definition video helped to drum up demand for LCD and plasma TVs.

However, there is still only a limited amount of 3-D content and consumers would need to change viewing habits since the televisions require special glasses to enable the 3-D effect. The new televisions will also be more expensive than conventional models.

Panasonic President Fumio Ohtsubo said it’s a “very ambitious” undertaking to persuade people to make the switch to 3-D and it may take “three to four years” before it starts to gain broader appeal. Panasonic has said it plans to introduce a 3-D TV next year.

Osaka-based Panasonic says 3-D looks better on plasma displays, a technology that it is dominant in. Panasonic sees 3-D as a strategic way to keep plasma televisions in demand to counteract widespread adoption of LCD televisions.

Sony Corp. is also making a big push into 3-D with LCD televisions.

Last month, Sony Chief Executive Howard Stringer said at an electronics trade show that it plans to introduce its own 3-D television in 2010. He also said Sony will put 3-D compatibility into many of its devices including its PlayStation 3 game console.

Speaking to reporters at an event during Japan’s CEATEC electronics show, Mr. Ohtsubo said the company is currently focused on large-sized 3-D televisions, but it expects many future innovations within the field, such as smaller size TVs and even portable devices for 3-D video.

“In the beginning we think glasses are a must, but in the future we think that we can enjoy 3-D content without glasses,” said Mr. Ohtsubo.

Even without 3-D televisions, Panasonic expects to increase shipments of plasma display and LCD televisions by 54% in the fiscal year to March 31, as consumers continue to upgrade from their older TVs.

But Panasonic’s big push into 3-D comes amid heavy losses at its main consumer electronics business, which has been pressured by intense price competition. In August, Panasonic reported a net loss of 52.98 billion yen, or about $596.6 million at current rates, for the April-June period.

Like other companies, Panasonic has seen its results pressured by the strengthening yen, which makes TVs and others devices more expensive when exported for sale to consumers in other countries. Hitoshi Otsuki, a senior managing director in charge of Panasonic’s overseas business, also cited the comparatively weak South Korean won, which he said puts Panasonic at a 25% price disadvantage versus South Korean electronics makers.[/B]