Sony turns to Sharp for LCD supply
Do most flat-screen TVs strike you as numbingly similar? That's because under the hood, they are. LCD production is consolidating into an ever smaller number of suppliers. Sony and Samsung compete on store shelves, but they buy their LCDs from the same company — S-LCD, a joint venture. Now Sony is forming a new joint venture with Sharp, another fierce rival. Why? Moore's Law, the overlord of chips, is moving into the TV world. Making an LCD screen requires skill in handling silicon, and billion-dollar investments: Sharp's latest plant costs $3.5 billion, an expense Sony will now subsidize.
Expect more consolidation: Just as the PC-chip market has narrowed to two suppliers, Intel and AMD, the flat-screen market can likely sustain even fewer players than it has now. Will Sony be one of them? Unlikely. Caught flat-footed by the rise of LCD TVs, it was forced into its Samsung venture. Now, with Sharp, it will be a junior partner, owning one-third of the business.
The Trinitron made Sony a household name. But in the LCD business, it's just another purchaser of commodity parts, with a brand name tacked on. Sony will no doubt argue that in a future of networked televisions, software, not hardware, is what matters. But in that field, Sony has hardly distinguished itself.