Koreans seek to slow demise of television's dominant technology
Monday, August 15th 2005, 9:45 am
By: News On 6
TIJUANA, Mexico (AP) _ Samsung Electronics Co. has an odd sales pitch for one of its new televisions. A slide show for dealers features a drawing of a TV on a tombstone that reads, ``The news of my demise is greatly exaggerated!''
The Korean manufacturer is referring to cathode-ray tube, or CRT, televisions _ the heavy boxes that have dominated the business since television was introduced at the New York World's Fair in 1939.
As rival technologies become cheaper, the era of the conventional tube TV is ending.
Yet Samsung and a Korean rival, LG Electronics Co., are refusing to abandon the old-style tube TVs entirely. They continue trying to improve CRTs even as they and other television makers are building more and more factories that churn out super-thin LCD and plasma televisions.
Samsung's ``slim'' CRT, which began rolling off a Tijuana assembly line in April, is an effort to stall the technology's anticipated demise.
CRTs _ which some videophiles insist produce the best pictures _ use a gun that fires electrons in a heavy, glass tube to light phosphors, far different from flat-panel TVs. LCDs affix liquid crystals to thin plates of glass, while plasma uses special gases to light the screen.
Manufacturers have tried for years to flatten CRTs but failed to design an electron beam that's wide enough to light the screen's edges, said Paul Semenza, an analyst at market researcher iSuppli Corp. Samsung appears to have cracked that riddle, though whether it can produce them on a large scale remains to be seen, he said.
Measuring 16 inches deep and weighing 120 pounds, Samsung's new 30-inch-screen slimmer CRT is still far too clunky to hang on a wall. But its $1,000 price tag beats many others with high-definition digital displays.
Samsung's 32-inch-screen liquid crystal display, or LCD, television may be only 4 inches thick and 36 pounds, but it lists for more than twice as much, at $2,500.
The company also plans a 27-inch model for $900 this fall and a 26-incher next spring at an undetermined price, though Samsung says it will sell trim CRTs at about half of similarly sized LCD screens, even as their prices plummet.
Meanwhile, LG Electronics began selling a 30-inch slimmer CRT in Korea this year and will introduce it in the United States next year at an undetermined price. Like Samsung's, it is about one-third slimmer than conventional TVs.
The ``tens of millions'' of dollars that Samsung says it spent to develop the slimmer CRT is a small gamble compared with investments in flat panels _ it opened a $2 billion LCD plant near Chonan, Korea, this year in a joint venture with Japan's Sony Corp. and is building an LCD plant for $2.1 billion right next door.
Still, Samsung and LG are defying conventional wisdom that the days of conventional TV are almost over.
Japan's Matsushita Electric Industrial Co., maker of Panasonic products, built three plasma plants in Asia and will soon open a fourth _ an $835 million factory in Amagasaki, Japan, that's the size of 20 football fields.
In December, Matsushita and Japan's Toshiba Corp. closed their joint CRT plant in Horseheads, N.Y., eliminating 800 jobs. Matsushita said demand for the old-style TVs was flagging against competition from flat panels.
The change is particularly evident in the industrial sprawl of Tijuana, a city of 1.2 million people bordering San Diego and a longtime hotspot for television makers.
At a Samsung factory across the street from Hyundai automobile and Coca-Cola factories, the larger of two buildings was converted two years ago for newer technologies including plasma and LCD. Today, about 2,000 of the plant's 3,500 employees work on those new TVs.
CRT still accounted for 75 percent of televisions sold in the United States and Canada last year, according to iSuppli, and many big-name TV manufacturers still sell them. But few are investing to innovate using the decades-old technology.
CRT is expected to claim only 16 percent in 2009, when plasma eclipses the conventional tube, iSuppli forecasts. LCD is projected to overtake CRT in 2007.
``The shift is monumental,'' said Bob Batt, executive vice president of Nebraska Furniture Mart Inc., which sold nothing but CRTs about five years ago. CRTs account for about half the TVs at his stores in Omaha, Neb., Kansas City, Kan., and Des Moines, Iowa, today, and Batt said they may disappear entirely next year.
Circuit City Stores Inc. sells about 40 to 50 models of LCD TVs, up from four only two years ago, said Tom Crowell, merchandise manager for television. Its plasma offering jumped to about 20 from two. To make room, boxy CRTs are being dumped.
Samsung isn't fazed.
``You read all these stories about how the world is going flat panel,'' said Jim Sanduski, Samsung's vice president of visual display marketing in North America. ``CRT has some tricks to forestall part of the transition.''
The slim CRT will do well as long as it can compete with LCDs on price, said Peter Weedfald, a Samsung marketing executive. Besides, some shoppers may already have cabinets that were made for boxier sets.
``Why would I pay two, three times as much for an LCD or a plasma when I'm not going to be able to see the attributes of a flat panel in my cabinet?'' Weedfald said.
One recent weekday, Samsung's assembly line for the slim CRT displays an electronic bulletin board that reports each worker is spending 27.8 seconds on each television, drilling holes and plugging wires at wages starting around $8 a day. At that rate, it will produce 1,200 for the day, short of its target of 1,500.
The rest of the more than 10,000 CRTs assembled daily are much bulkier, but the production line looks the same. Most will be sold in Latin America, where fewer people can afford pricey TVs.
Samsung says it has sold ``tens of thousands'' of the slim CRTs since they hit U.S. stores in May. They began selling in Korea earlier this year.
Shoppers at a Circuit City store in San Diego the other day said they liked the picture and the price, but nearly all said they wanted something flatter.
Alejandro Herrera, a 38-year-old software specialist at a Mexican bank in Tijuana, plans to save up to $3,000 to buy a plasma TV later this year.
His wife, Amparo, walked up to the Samsung TV, inspected the back and shook her head disapprovingly.
``It's obsolete,'' she said.