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The Problem with Cheap 4K UHD TVs

Tier-one TV makers on who wins and who loses in new TV market

July 10, 2013 By Nancy Klosek
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Dealerscope recently talked to the top executives from some of the major TV vendors about how they’re dealing with the most pressing trends in the industry. One trend they’re now facing is the arrival of inexpensive 4K UHD TVs from third- and second-tier manufacturers. We asked them if that poses a threat to their brands and whether the low prices will commoditize the product and cheapen consumer perception of the new technology. For the full interviews, see the July issue of Dealerscope.
Mike Fasulo, Executive Vice President, Sony: I don’t see it as a threat.  I see it as a terribly confusing situation for the consumer. I see some of it as irresponsible. From a panel point of view, we learned in high definition the differences in panels, and how cost of entry into LCD was so low because if you had a high-definition panel you could say you were high-definition LCD. One of the core reasons we were not willing to give up on the term 4K was that we have an equity and a history on the professional side of true, native 4K cameras, 4K content acquisition, etc. So when we look at entry into the category, thoseguys who are going to come in and just provide a low-cost panel without theadded value of what you can do with your current content, to me, is irresponsible.
 To shortchange the consumer is kind of disappointing. We’re just creating a new market, and already we’re hearing of brands coming out without upscaling, and trying to run a race to the bottom with pricing.  Unfortunately, the consumer is going to be the victim in this case, which really bothers me.  We emphasize not just the number of pixels but the picture engine that drives those pixels. We have eight million pixels in ours, and we’ll include the number in our specs, but the whole numbers game is not the play here; it’s really the experience.
Jay Vandenbree, Senior Vice President, Sales & Marketing, Home Entertainment Group, LG: I think it poses threats at a couple of levels. The first is that it potentially sets a pricing limitation that there is little value in the R&D and things that go with developing a technology like Ultra HD, and that certainly isn’t the truth. From an industry standpoint, we struggle every day to make sure we can extract the value from our product. For someone to come in and say it’s only worth $1,500, I think that’s a potential issue. Even if it’s successful in terms of people wanting to buy a brand-new technology at a small price, now there’s going to be dissatisfaction with its output – especially in terms of overall picture quality and the 2K-to-4K upconversion. And that is just as bad for the industry, because it says the technology isn’t that good. But when done right, the technology is outstanding. I don’t understand why any retailer would want to support that, because it impacts their ability to be able to garner the value of the product. My opinion is that it’s a miss for a manufacturer wanting to drive that, or for a retailer wanting to support it.

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