As CES 2013 showed, the Chinese aren't coming – they're already here
The TV landscape is changing.
From being the leaders – both in technology and sales – , big Japanese names such as Panasonic and Sony are in the unenviable position of playing catch-up to the new masters of the market, the South Korean giants LG and Samsung.
And while the Koreans have been involved in a slightly childish game of 'tit for tat' at CES 2013 – a friend suggested slightly mischievously that when LG announced its curved-screen OLED screen, some Samsung engineers were sent round the back of their massive stand with a TV and a hot air gun –. the Japanese attempts to stay on the ball had mixed fortunes.
Panasonic went for a massive range of TVs using existing technology, plus a late-announced OLED model, while Sony's 'big reveal' was a prototype OLED screen showing Windows rebooting messages – this when at least one of the Korean rivals was quoting (scary) prices and delivery dates for its OLED TV.
But behind all this posturing, there's an increasingly obvious spectre at the feast – and it's one threatening not only the Japanese majors' increasingly frantic attempts at TV division recovery, but also the ascendent Korean majors.
For not only are 'the Chinese coming', as the TV industry has been muttering in increasingly worried tones for some years now – they're here.
What were once slightly quirky companies – only spotted at the likes of the Hong Kong Electronics Fair, and with rather clunky LCD TVs alongside their My Little Pony- and High School Musical-branded CRT portable TVs and karaoke machines – are now mainstream players, ready to stake their claim on the global stage.
Consumer electronics company Hisense made its presence very definitely felt at last week's CES 2013, taking the prime exhibition position once hogged by Microsoft to install its own enormous stand, with everything from 'smart' fridges to even smarter TVs, while rivals such as Haier not only have new product in depth, such as the TV above, but are proving they can mix it with the existing big boys when it comes to the latest TV tech.
OK, so Panasonic has recently announced it's scaling back its Chinese TV assembly operations with the closure of its Shanghai plasma plant, but as well as Chinese companies making TVs for, or with, some of the big established names – Philips springs immediately to mind, with its minority holding in a joint venture with TPV (below) now making its TVs for Europe – there are now clear signs that those same companies want to be seen as a force in their own right.
For example, both Haier and Hisense showed huge ranges of product at CES, from TVs all the way through to cooking and refrigeration appliances – in other words, the same kind of diversity previously the preserve of Panasonic, say. Or LG or Samsung, for that matter.
No shortage of ambition – and determination
But then there's no shortage of ambition in the way the Chinese companies are tackling things: Haier has its roots in a state-run refrigerator factory founded in the 1920s, has risen to be the world's largest maker of 'white goods' – fridges, washing machines and the like – with sales last year of around £14.5bn last year including a claimed 12m fridges, and 70,000 employees.
Its name comes from an earlier joint venture agreement with German high-end appliance company Liebherr – Haier is so much snappier than Qingdao Refrigerator Co, or indeed Qindao-Liebherr, and was taken from the Chinese version of the name – and by 2005 the company was confident enough to make a bid for major US appliance company Maytag. eventually losing out to Whirlpool.
Hisense, meanwhile, has similar roots in Qingdao, and is also state-run, although as with Haier there's an element of private enterprise in the operation. But while Hisense is growing to encompass a similar diversity of products, it's coming at the task from the opposite direction, having started out as Qingdao No.2 Radio Factory in the late 1960s, and been switched over to TV production at the beginning of the 1980s.
So what emerged at CES? Well, as well as matching the likes of Samsung when it comes to 3D, LED and the like (up to and including both Ultra HD and glasses-free 3D), Haier was showing it's no slouch when it comes to styling, with a 'virtually edgeless' display to give the 'sheet of glass' look (left).
And when it comes to advanced technology of the kind manufacturers like to trot out at event such as this, Haier of course had the gesture control and face recognition it had previously shown (below).
This is able to set up parameters such as favourite channels according to who's watching the set, and even respond to where on the screen you're looking.
But it went one stage further, with brainwave control of the TV, using the MindReader headset (left) from Silicon Valley company NeuroSky.
Think of a channel you want to watch? Well, sort of – and the system also includes 'an assortment of specific concentration games designed to help children and adults practice their abilities to focus or relax'.
By the way, it may be worth noting that another product from NeuroSky is the Necomimi, a pair of wiggling cat ears on a headband controlled by your thoughts.
Available in a choice of ears (from Jungle Leopard to Minky Brown) plus Devil's Horns, the system is yours for just under $100 from www.necomini.com (US only so far, unfortunately).
Back on topic, Hisense went for maximum impact with its 4K Ultra HD TV (above) – no less than a 110in model, though it will also be available in 65in and 84in versions.
The XT900 series will have Smart TV functionality with Wi-Fi built-in, active shutter 3D capability, and a USB-mounted detachable camera usable for Skyping as well as gesture control and facial recognition. In addition the handset has a microphone, enabling voice control.
As if all that wasn't enough, the company is claiming 10m:1 dynamic contrast for the XT900 models, thanks to U-LED (or Ultra-LED) technology, using software and hardware optimisation to deliver better contrast, wider colour gamut and faster speed for the XT900 models.
However, Hisense is yet to announce availability or pricing.
Alongside that, the company also has a glasses-free 3D TV, the 60in GF60XT980 – the same size as the glasses-free prototype shown by Philips at CES 2013. Using 4K technology to deliver 2160p resolution, HiSense says its possible to use the lenticular lens technology needed for no-glasses 3D while at the same time retaining 'Full HD' resolution.
The company says that its TV, still in prototype form, 'utilises a powerful video engine to push high resolution content to the UHD screen and through a high-precision lenticular lens, allowing the television to be viewed from wide angles.
'The television also features a facial tracking system that discretely tweaks each sweet spot to give viewers the best experience possible. The video engine is also able to convert regular 2D content to 3D, giving viewers the choice to enjoy almost any content in a rich, glasses-free 3D environment.'
Glasses-free set to go mainstream
And its promise is to ensure this technology doesn't stay at the esoteric end of the market, the company's US VP of Consumer Electronics, Peter Erdman, saying that 'Glasses-free 3D technology is the holy grail of the television industry – as this technology matures, Hisense plans to deliver it to consumers through mainstream products, truly opening up the market to a new world of glasses-free 3D entertainment and television viewing without compromise.'
Oh, and the company also has a transparent 3D TV, probably designed for advertising use.
Why? Kinda because it can, we guess. Or maybe it felt a need to actually show what we all thought Samsung was teasing with that strange TV in a landscape picture it put out before CES, but which turned out to be a panel on an opinion-dividing metal 'easel'.
Meanwhile another Chinese company, TCL, was making a big splash at CES 2013 with its own 110in Ultra HD screen, and announcing a marketing tie-up with Marvel which will see the TV used as 'Tony Stark's smart TV choice' in Iron Man 3, due to be released worldwide around the end of April this year.
Alongside that, the company also showed its MoVo with Google TV 3.0 sets, said to combine its 'manufacturing expertise and newly introduced Personal Box Office (PBO) technology, Marvell Semiconductor’s cutting-edge SoC design technology as well as Google’s advanced search engine.'
This will enable it 'to offer a highly intelligent system that is designed to recognise individual preferences and automatically recommend the best match content for the right user at right time.'
According to Li Dong Sheng, TCL Chairman and CEO (seen left with Iron Man) puts it, 'Moving forward, we will continue to focus on our globalization strategy and spare no efforts in providing worldwide consumers with the latest best quality electronic products with richest experiences.'
The company says that it 'has achieved 15.2 million TV sets in annual sales volume, following closely behind Samsung and LG to set a new benchmark for the fast-rising China enterprises and signify TCL officially steps into the first camp of global TV industry.'
On this showing, who'd argue with Chinese companies such as Haier, Hisense and TCLnot just keeping pace with current market leaders LG and Sasmung, but reeling them in and overtaking in very short order.
After all, Hisense says it plans to be in the top three global TV manufacturers within the next two years.
So, while old-school TV leaders like Panasonic and Sony have their eyes firmly fixed on catching up with the new leaders of the market, they might well want to take a look over their shoulders: the Chinese brands aren't just coming – they're here.
And if their achievements to date are enough to make the Korean market-leaders wary, the Japanese brands once dominant in this market should be even more scared right now.
Serious R&D investment
After all, the big Korean companies have got where they are today not just by aggressive sales policies, but by major investments in R&D: Samsung has a massive research establishment, as I found when I visited a few years back – and it's got even bigger since!.
Meanwhile LG has just announced a major R&D investment for 2013, setting aside some KRW6tn (£3.5bn) to develop new technologies and products as part of a total investment this year of some KRW18tn (£10.5bn).
And the Chinese? Well, Hisense has just begun construction on what it calls 'the world's largest R&D base' in Qingdao. Designed to satisfy the company's needs for the next three decades, the new 430 acre facility will replace the current 50 acre site (below), which 'cannot meet the demand of Hisense’s R&D and rapid growth'.
It's planned that the new facility will take on tens of thousands of employees, and 'be a future technological hub for technology, information, and research', designed to be 'the world's most advanced and innovative research and development center'.
The intention is that 'Qingdao will be the most important R&D center for multimedia display technology not only in China, but also globally'.
Now, anyone still labouring under the misapprehension that the Chinese TV industry is just a dim and distant threat…?
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Comments
And when all production has gone to China and your service industry is based in India and there are no jobs for you. Will you be happy to go the way of the Greese economy.
What’s the capital of Greece?About €3.
So when the Chinese have got you by the short and curlies remember this tale. There is a reason for buying British!
Absolutely, philthunder – could you just run that list of British TV manufacturers past me again?
Panasonic still has the best screens by far (Plasma) and I haven't seen any new 'technology' that produces better, dispite all the promises.
I guess something will come along at some stage that will be better, maybe from China, who knows!
As a discerning buyer who isn't impressed by improved tech if it doesn't improve core performance, I'll have to wait and see what the actual picture and sound quality of future TVs is before considering them a serious challenge to Panasonic and Samsung.
I'm sure the masses will be swayed by the latest tech however, and obviously price, and as a current owner of a Pioneer Kuro I am well aware that the best picture quality and sound are not what your average consumer is prepared to pay extra for, and that 'good enough' is a yard stick set quite low.
How many shoppers will go to the trouble of checking our reviews or specs of TVs before making a purchase? A very low percentage indeed, and the perception will be that one Full HD TV has exactly the same quality as another.
With this in mind, how successful a new manufacturer will be will be determined by their ability to produce the latest tech at the lowest price, which will also depend on exchange rates and an ability to play the system when it comes to where to base manufacturing plants and source materials/parts.
Man this is all pretty disturbing. But I guess it's the price for moving all production to China...
Fascinating, yes, but I'm not sure it's disturbing...
Really well written piece and enjoyed reading that. as a marketer, I get excited to think how these major companies will assert themselves as competing worldwide brands which is something I think the Japanese brands were good at because of their company and product heritage.
I have seen these TV's in Dubai, and I am sorry andrew, but there aren't that many takers from what I can in the shopping cards.
It's still samsung, LG, Sony and panasonic.
I am personally not going to buy a TV brand called Hi sense.
Just because the chinese make cars doesn't mean BMW Mercedes or Porsche need to start getting worried about it.
Even the chinese prefer branded goods to local made ones.
a TV is still a major purchase. These brands have a long long way to go still.
You might as well say 'Just because an Indian company makes cars doesn't mean established rivals need to start getting worried', when that Indian company has just announced sales up 20% on last year's record figures, and is taking on 800 new workers to boost its UK production further, as well as opening up factories in both China and India.
There's more to it than just TVs being made in factories in China: the companies I mentioned are building up the clout to make serious moves if required (eg the Philips 'joint venture' I mentioned above, in which the Dutch company holds just 30%).
I think you might be making the same error many have, in thinking that Chinese consumer electronics means cheap versions of established technology, just as they did about Korean products and – even further back – Japanese ones.
All that's changing, and fast.
I wouldn't buy a jaguar, when there are real european cars like BMW, Audi, VW, Mercedes.
but then if a jag is 50 % of a BMW price... who knows.
Somethings will forever be british hopefully and stay in the UK, like Naim Audio.
you have a good point.
I may not buy a TV called Hi sense, but I am seriously considering buying a Huawei cellphone.
The draw is the price. If I can get something that is 90 % of a samsung galaxy at 60 % of the price, then Huawei is onto a winner.
But it still relates to price and technology. If hisense can produce an IGZO panel at 60 % of the price that sharp charges then God help the japanese.
I love cheap chinese made goods. Not chinese made goods, but cheap chinese made goods.
will the day ever come when china can make something like a BMW 535i at 60 % of the price?
But who's making most of those Sharp panels now? A Japanese factory more or less run by Taiwan-based Foxconn, which has its major production base in China.
And it's using those panels in its own TVs now...
Angela Merkel would be proud of you.
she would be until she hears that a merc made in india is not a real merc :)
and I dare Merc to openly state on their cars that are made in india, that they are in fact made there so the consumer can see it before buying
anyway made in china didn't hurt apple one bit so who knows.
It pained me to see skyfall knowing who really owns jaguar now
… And a Jaguar made in Birmingham, Merseyside or Warwickshire, or a Land Rover made in Merseyside or Solihull?
My wife's just bought a VW. It was made in Bratislava.
Not as much as it pained everyone to see Die Another Day, in which every single vehicle appearing on screen was from Ford or one of its (then) subsidiaries.
And that brings us back to doh-oh-oh-oh...