TV Makers Hope New Features Will Reverse Steep Price Declines

As TV makers struggle to stay profitable amid weak demand, some Asian manufacturers are attempting to reverse the steep price declines with new features, such as voice recognition and higher resolution displays.

The new features, to be showcased this week at the Consumer Electronics Show in Las Vegas, could be the next battleground for TV manufacturers. Whether consumers will be receptive to them or not will be a critical test for a TV industry that has struggled over the past year, with many manufacturers losing money as TV prices have fallen sharply because of tepid demand and a supply glut.

Samsung Electronics Co., the world's biggest TV maker by shipments, is showcasing a television that can respond to voice commands and gestures without the need for a remote control. The feature is added to its lineup of so-called Smart TVs—sets equipped with processors that enable users to download apps and movies, surf the Web and store photos, much like what consumers do with their smartphones and tablet computers.

Second-ranked LG Electronics Inc. is attempting to bring high resolution to TVs bigger than 70 inches with "ultra-definition" displays that promise double the resolution of current full-high definition liquid crystal displays.

Japan's Sharp Corp. is showcasing what it claims is the world's first 80-inch 3D light emitting diode TV. LED TVs don't require backlights, making them more energy efficient and thinner. Sharp said it comes with built-in Wi-Fi and access to apps such as Netflix, Hulu and Facebook, using Sharp's own smart TV interface.

Meanwhile, both Korean companies say they plan to mass produce and sell 55-inch TVs using organic light emitting diode technology this year. OLED displays are brighter, thinner and have faster response time than LCDs and are widely used in smartphones. But until now, manufacturers haven't had success using them in big TVs because of steep manufacturing costs.

The move comes as companies including Google Inc. and Apple Inc. are also gearing up for greater competition in the smart-TV market.

Google said last week that it's working with various companies including Samsung and LG to offer a new version of Google TV, a Web-connected television that comes with Google software. Though Apple hasn't made its plans public yet, analysts speculate that a new Apple TV is being developed for launch either later this year or in 2013. Samsung expects its Google TV to be out in the U.S. market sometime in the second half.

"By distinguishing with new features, companies can gain market share, but it won't be enough to turn around the market and reverse price declines," said SC Bae, analyst at Barclays Capital in Seoul.

LCD TV shipments this year are expected to rise 9% to 225 million units from 206 million units in 2011, according to NPD DisplaySearch. Sanford Bernstein Ltd. senior analyst Mark Newman projects shipments of smart TVs to hit 90 million units by 2015 from about 20 million units in 2011.

In the U.S., the average price of the mainstream 40-inch LCD TV has fallen below $500 for the first time, while the average price of 47-inch LCD TVs are below $1,000, according to NPD DisplaySearch. The firm projects TV prices this year to fall about 6%.