The Sony XEL-1 OLED TV is a beautiful display. Its contrast ratio makes pictures pop, it's thinner than a credit card, but with an 11-inch screen, it's too small, and at $2,500, too expensive.
But it's been a year since it was introduced in January 2008, and as of today, it still has no competitors. Where are they?
Though we've been long promised that the era of OLED (organic light-emitting diode) TVs is just around the corner, it appears we're going to have to wait even longer. The major players in electronics who have the resources to build OLED TVs have been whacked by the global financial meltdown along with the rest of us. In other words, the timing to jump-start a brand new TV technology is terrible.
"The cost to manufacture them remains high and will remain high until someone's willing to take the risk to develop their own manufacturing capacity on a large scale," explained Paul Gagnon, TV market analyst for DisplaySearch. "Risky investments are not something most of these companies are looking at right now."
Samsung, Sony, LG Electronics, Toshiba, and Panasonic have at various points promised to make OLED TVs. Only one of them, Sony, has done so. But even Sony's is hardly what most people would call a viable option. It's not the standard size of a TV, and isn't exactly priced for a recession. The other firms have only prototypes to show.
There was some hope that Samsung and Sony would be able to release larger OLED TVs this year. But if they were, they'd have brought them to CES in January in order to stir up excitement for them. That didn't happen. Instead, Sony brought the same 11-inch XEL-1 product that's been available for a year, as well as a 21-inch prototype. Samsung brought out a 40-inch prototype.
It's not that OLED is completely impossible to produce. There are a variety of gadgets sporting OLED screens made by these companies, but they're really small: cell phones, GPS devices, and now portable media players.
Small is easy. Making OLED displays big enough for the most attractive applications like laptop screens and televisions is the hard part. There are only a few TV manufacturers with the resources to invest in and build enormous panel factories, among them Samsung, Sony, Sharp, LG, and Panasonic. Panasonic said in September it would hold off on OLED--which basically means it's going to ride the success of its dominance in plasma displays for the time being. Toshiba, which showed a large OLED TV prototype in early 2007, said just a few months later that it would wait to see how popular the sets would be before jumping in head first. (Also, instead of doing it individually, there are a few smaller other makers getting together to push OLED into faster mass production.)
The barrier to moving from a whiz-bang prototype to a product that can be produced in reasonable volumes at prices that even the most discerning gadget enthusiasts won't balk at mostly involves money. A lot of it.
Right now, OLEDs cost twice as much to produce as LCDs. That's because the volumes in which they are produced are so much lower. "While LCDs are produced in the tens of millions or hundreds of millions, whereas OLEDs are produced (in volumes of) a million a month," said Barry Young, director of the OLED Association, whose group promotes the OLED industry and counts most major manufacturers and patent owners behind the technology as members. Until OLED production can be achieved in much larger volume, the cost to produce them will remain exorbitantly high.
For its part, Sony says it has poured 22 billion yen ($243 million) into ramping up its OLED TV factories, which the company says will be up and going by March 2010.
The promise of OLED though is similar to the argument for weatherizing homes now: it may cost a lot initially, but that the savings on electricity bills over time will be worth it. OLED is expensive now, but there are fewer pieces that go into constructing one than an LCD.
"When you get to point of equilibrium, when OLEDs reach 10 million displays produced a month...they should be cheaper to build because they have fewer components. Ten to 20 percent less expensive eventually," Young says.
There are still some questions on the technology's lifespan, however, which is another challenge that will need to be addressed.
Meanwhile, LCD TVs are still at the height of their popularity. Samsung is the world's largest producer of LCDs, and as of the end of 2008, more than 10 million LCD televisions were shipped each quarter to North America alone, and there are plenty of countries around the world that have yet to embrace LCD technology.
But with many of these potential OLED TV makers reporting huge losses (Samsung suffered its worst quarter ever, losing more than $680 million last fall. Sony will cut 5.5 percent of its workforce in order to save $1 billion in the next year, and Panasonic will lay off 15,000 after its first quarterly loss) it's likely a difficult decision to make a bold move to an unproven technology like OLED TV.
LG could be the exception. At CES, President and CEO of LG Electronics North America Michael Ahn said his company would not cut back on money spent on innovation. LG Electronics had said it would introduce a 15-inch OLED TV in June 2009, but that could be pushed back since we didn't see anything at CES. So when will we see a variety of OLED TVs on the shelves of our favorite electronics retailer? Later this year, a 14.1-inch OLED display is scheduled to be introduced for use in notebook PC. The display will come off of Samsung's production lines, though it will be snapped into a PC made by a "major notebook vendor," according to Young. It could also be used as a TV, but when and by whom is unknown. Despite Sony's teaser product, OLED TVs at this point are at least three to five years from being a reality for the average consumer.