Euro Samsung Exec Warns Against UHD TVs

By Stewart Wolpin On Apr 22 2013 - 2:48pm

Michael Zoeller, Samsung's senior director of sales and marketing TV/A/V Europe
Michael Zoeller, Samsung's senior director of sales and marketing TV/A/V Europe


UPDATED! Pula, Italy — TV manufacturers looking for a some good news on both margins and unit sales for 2014 didn’t get it from Michael Zoeller, Samsung's senior director of sales and marketing TV/A/V Europe, along with market research firms GfK and DisplaySearch at the annual IFA Global Press Event, here.

Essentially, Zoeller advised consumers not to buy a new 4K Ultra High-Definition (UHD) TV.

“No UHD TV today will be compatible with the UHD standards to come,” Zoeller said last week at the Forte Village Mediterranean resort near Pula, in the Italian region Sardinia.

And neither market research companies that made presentations had good news for the TV business either, both noting that worldwide LCD TV sales were down for the first time last year, and that 2013 sales wouldn't be much of an improvement.

While LCD TV sales may fall in 2013, IFA itself — which will run Sept. 6-11 in Berlin — is due to add 2 percent more exhibit space and organizers are expecting an increase of 1.5 percent from 2012's 240,000 trade and consumer visitors.

Zoeller’s aim wasn't to discourage consumers from buying new UHD sets — just UHD sets not made and sold by Samsung.

Samsung's Evolution Kit, due sometime next month, is designed to keep the company's S9 85-inch UHD LED backlit LCD TV up to date as much as possible.

But Zoeller did acknowledge the Evolution Kit would only be good for four to five years of system updates and advances, and would likely fall short of supplying compatibility with future UHD standards.

Zoeller cited four compatibility issues that could render today's UHDs obsolete in about two to three years:

• broadcast data-rate problems;

• streaming;

• Blu-ray capacity; and

• HDMI 2.0.

The solution to the first three could be the upcoming HEVC (High Efficiency Video Coding) H.265 compression standard, the successor to today's current H.264 compression, Zoeller said. The final HEVC standard was published in January and last month Samsung announced its upcoming Galaxy S 4 would be H.265 compatible.

However, no TV manufacturer has yet announced H.265 compatibility; HDTVs of any ilk with HEVC decoding aren't likely until 2014's models at the earliest.

But HEVC is merely one UHD standard hurdle to be overcome, according to Zoeller, who said UHD-compatible Blu-ray “is theoretically possible by 2015” but likely later since HDMI 2.0 and a new DRM were necessary.

Zoeller also predicted broadcast data rate issues likely wouldn’t be solved until 2016 at the earliest.

Therefore, Zoeller estimated a complete UHD standards ecosystem — up-scaling, streaming, packaged media and broadcast — would likely not be in place until 2023. Complete HDTV standards created by the Grand Alliance, of course, were announced and available before HDTV sets became generally available in the late 1990s.

Despite this pessimistic UHD standards picture, Zoeller teased that Samsung would announce both larger- and smaller-sized UHDs at the upcoming IFA show. During International CES in January, Samsung displayed a 110-inch UHD model in its booth.

(Samsung Electronics contacted TWICE original story was posted saying: “Consumers who purchase a Samsung UHD TV will enjoy the picture quality benefits of UHD now, and even after, the standards are finalized. The changes required to support the new standards will be implemented through our Evolution Kit, which will be available to owners of our UHD TVs. Samsung is committed to providing the best TV viewing experience to our customers and the Evolution Kit is our simple solution for them to get the latest technologies and features.)

Zoeller wasn't the only presenter at the IFA event to cast some doubts on UHD 4K's future.

Paul Gray, director of European TV research for DisplaySearch, warned that UHD TVs were just another attempt by manufacturers to offer more than HD, and posed “severe danger of poisoning the water … like 3D.”

For one thing, Gray opined that manufacturability of 4K by 2K panels was “not assured.”

Like Zoeller, Gray cited myriad UHD problems, including broadcast standards and program production as well as the inclusion of HEVC ICs waiting until 2014 models that could affect UHD sales viability.

However, Gray did project shipments of UHD sets would reach nearly a million this year, rising to nearly 4 million next year, nearly 7 million in 2015 and nearly 10 million in 2016.

Gray also was less than bullish on the future of OLED TVs. Noting that last year's OLED hype was not matched by reality, Gray reported that large OLED panels are “terribly hard to make” and that yields were “stubbornly low” — below 10 percent.

Gray's outlook on standard HDTV wasn't optimistic, either.

Shipments of LCD TVs dropped worldwide 1 percent last year, according to Gray, and shipments of HDTVs worldwide overall fell 6 percent.

Gray projected HDTV sales in 2013 would be “soft” — flat — before rising 4 percent in 2014.

With price erosion, LCD TV revenues worldwide dropped even more precipitously, by 8 percent in 2012.

Gray said revenue would continue to drop over the next four years.

Meanwhile, GfK research closely aligned with Gray's findings. According to the market research firm, total LCD TV sales globally fell from a high of 213 million in 2011 to 207 million last year.

GfK, however, projected a slight uptick in unit sales to 213 million this year, and to a healthier 224 million in 2014.

GfK also forecast sales of tablet PCs would out sell LCD TVs next year by 51 million units.

Worldwide, the only screen size to experience growth were 50-inch and larger; demand for sets 60-inches or larger exist mainly in the U.S. and China.

Sales of traditional Japanese and Korean brands would be further impacted by “Chinese set makers poised to break out,” Gray said, but added that while Chinese TV makers “have mastered the technology, their challenge is branding and marketing.”

Samsung would like to clarify that consumers who purchase a Samsung UHD TV will enjoy the picture quality benefits of UHD now and even after the standards are finalized.  The changes required to support the new standards will be implemented through our Evolution Kit, which will be available to owners of our UHD TVs.  Samsung is committed to providing the best TV viewing experience to our customers and the Evolution Kit is our simple solution for them to get the latest technologies and features.

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