Sony Set to Exit OLED TV Business?

In a continued effort to shutter off parts of the company that are not profitable, it’s expected that Sony CEO, Kaz Hirai, will soon end the company’s OLED television division. In 2012, Sony and Panasonic entered into a partnership in order to get a better return on OLED R&D, and share technology to help bring manufacturing costs down. Since then, little has progressed on the partnership that many consider dead.

While OLED televisions are pristine to a product portfolio and stand out from traditional HD televisions, due to the enormous cost of producing them, there’s been little appetite from consumers to purchase them. In fact, consumers keep expecting larger and large HD sets at lower and lower price points – the exact opposite of OLED televisions, which will trickle out in smaller sizes with larger price tags. So what’s next for Sony’s television business?

While OLED televisions make for a great demo at an electronics store and a dazzling press conference exhibit, it’s wise for Sony to put a halt in its OLED vision if it sees little progress is being made. As much as OLED televisions have been the darling of the press, the reality is that consumers don’t want to pay the high price tag that’s associated with them and it seems that Sony and others are making slow progress at bringing them to mass production with a reasonable price. This makes Sony’s exit of OLED televisions all the wiser.

Sony instead is reportedly doubling down on 4K televisions, which are able to be produced as larger sets for a far lower price than an OLED TV. Sony is also making great strides in the 4K market and capturing a considerably larger share than rival Samsung. Duing the past year alone, Sony has been able to grow its line of 4K televisions to three series with prices for the 2014 fleet starting as low as $2,099. In 2014, 4K televisions are expected to make up as much as 40-50% of Sony’s total lineup of large flat-panel TVs, compared with the 10-20% ratio of last business year.

While Sony’s exit from OLED makes sense, don’t be surprised to see them jump back into the game if/when there is better economics for the technology.