Samsung Confirms 3D TV Market Growth Slow
TP Vision wasn’t the only company on hand at the IFA Global Press Conference in Croatia this week. Samsung was also there to outline its plans to continue to dominate TV sales. Like TP Vision, Samsung had a lot of praise to share for the growth of smart TVs, but Samsung was also sharing some less than encouraging news about the growth of 3D TV sales. According to Samsung’s projections, 3D TVs will only account for about 30% of TV sales in 2012, compared to about 60% of sales for smart TVs. This is not to suggest that Samsung expects the lackluster response to 3D to impact its position atop the industry, nor does Samsung expect that its 3D TVs won’t continue to outsell rivals’ 3D-enabled sets, but it does suggest that 3D technology is not the upgrade motivator that the TV industry was hoping it would be as HDTV sales slow due to market saturation.
3D TV was supposed to be the HDTV industry’s next “High Definition”, the technology that encouraged existing owners to upgrade to a shiny new set. That, though, hasn’t really happened Samsung admitted today: speaking at the IFA Global Press Conference, the Korean company confirmed that predictions for 2012 3D TV sales is just 30-percent across the industry, despite the lashings of hype.
Why draw such a negative
Why draw such a negative connotation with 3D TV sales being only 30% of TVs sold when 3D sales only began only two years ago? Could anyone have expected anything better? While 3D is trickling down to the mid-tier panels, a huge portion of the market is in the low end where 3D hasn’t trickled down yet to the degree that “Smart TV” has. Samsung began introducing “Smart TV” features in 2007 models so to compare the two is quite unreasonable for just that fact alone.
You ask the perfect question:
You ask the perfect question: “Could anyone have expected anything better?” Samsung was the one drawing the comparison between smart TV market penetration and 3D TV market penetration and how that would guide Samsung’s development efforts for the next year or more, so presumably Samsung was hoping for something better. As technology trickles to the low end, margins shrink. The whole reason Samsung recently spun off its LCD manufacturing arm was because margins there have shrunk so much that the business is now unprofitable. The hope of all TV manufacturers was that consumers would embrace 3D quickly enough that they would spend more for premium TVs where margins are higher. With 3D growth slow, the only way to continue to penetrate deeper into the market is to wait for it trickle down to less expensive sets, as you rightly pointed out. In the meantime, Samsung will be turning instead to OLED in hopes of driving premium TV sales. In Samsung’s, and every other TV manufacturer’s, ideal world, 3D would have penetrated the market rapidly, allowing Samsung to reap greater rewards in margins before turning to new display technologies for the next round of high margin upgrading.
I just don’t see Samsung
I just don’t see Samsung drawing any direct comparison between the two technologies and their satisfaction or lack thereof with either number. It seems more to me that Slashgear has taken a slide from the Samsung presentation and spun it into something negative against 3D TV technology for whatever reason.
And I disagree that 3D TV growth has been “slow”. I certainly have not had unrealistic expectations for the technology, but I think a lot of Internet blogs have jumped on the hate bandwagon because there are a lot of people that love to criticize the technology. The fact is that 3D technology is not for everyone. It will never be as widely used and enjoyed as 1080p, “Smart TV” or many other features so to compare it to those types of technologies is not doing anyone a favor.
I think Slashgear was overly
I think Slashgear was overly snarky, and Slashgear got the quote in my write-up because they were the first site I saw that talked about Samsung’s presentation, but Slashgear does not seem to be wrong about the basic point Samsung made regarding 3D in the presentation. The presentation was called The Future of Smart TV – Now, was given by Michael Zoeller, Samsung’s European Director of TV Marketing, and was about how Samsung is going to focus its development efforts this year on its Smart TV platform. According to different reports about the presentation, he made the point that LED is now a commodity technology and 3D has not done as well as hoped, so the focus is going to be on creating differentiation through the Smart TV platform. I would imagine that Samsung’s recent deal with Blockbuster for a Samsung managed streaming service would be an example. There was evidently information about Samsung’s hopes for syncing services, some online storage service about which I have seen conflicting details, and a greater emphasis on gesture and voice controls. I have been trying to find more specific details about what Zoeller shared for a separate write-up, but unfortunatley most of the responses have been about his comments regarding 3D and about promises he made to show off a new “super” premium OLED TV at the IFA show in August. Some are suggesting that it will be a 4K TV.
None of this is to suggest that 3D will not continue to be an important part of Samsung’s strategy or that it won’t continue to grow in the marketplace. After all, the slide that Slashgear shows suggests that Samsung’s 3D TV sales are better than the industry average. I think it is simply an indication that Samsung sees more opportunities to make more money in other aspects of their TVs and that they will be competing more directly with other manufacturers in that realm. The shift in focus suggests that 3D technology probably will not see any major advancements for the foreseeable future, and with OLED receiving Samsung’s attention for the next round of “premium innovation”, we probably will not see 3D as the premium selling point for a while. Probably not until glasses-free is ready for prime-time.
Also, I think we are starting to see an acknowledgement from TV manufacturers that Smart TV platforms are not like regular hardware features. Normally when a new hardware feature is added to a class of CE devices, it appears only in the high-end devices, to drive high margin sales as I pointed out in my last comment. As a feature works its way down the line, it becomes a less valuable commodity feature, like the LED backlighting the Zoeller referenced. Eventually a feature is available across a CE company’s entire line-up. as I expect 3D will eventually be, at which point a feature’s impact on margin is essentially zero. I think most TV manufacturers approached their Smart TV platforms like a hardware feature at first. Add it to the TV, tweak it a bit for the next year’s model, and eventually every model will have it. I think that fear of Apple entering the TV market is prompting TV manufacturers to start thinking about Smart TV platforms as the constantly evolving software platforms that they expect Apple to treat it as and to see the backend services powering smart TV apps as monetizing agents. The idea of offering app upgrades probably scares the bejeebees out of every TV manufacturer’s old school execs. I can almost imagine them mumbling in their fever dreams: “Don’t give away a new feature. Make them buy a new TV for it!”