Japanese giants link up to fight off Korean pair

Japanese technology giants Sony and Panasonic are joining forces in a bid to steal a march on their Korean rivals Samsung and LG in the race to develop the next generation of television sets.

The two companies are to co-operate on developing screens based on OLED (organic light emitting diode) technology with the aim of establishing mass-production in 2013.

Panasonic plans to invest some $373 million (£240m) in its Himeji plant in western Japan for a test production line of panels using the technology.

Industry observers believe establishing a lead in the market for the sets, widely touted as the successor to liquid-crystal displays (LCD), will depend on being able to produce the screens at a low enough price.

Both Samsung and LG have developed OLED prototypes, with the sets expected to go on sale this year at a rumoured price tag of as much as $10,000, or about four times the cost of an equivalent LCD model.

Shipments of OLED TVs could reach 2.1 million sets in 2015 from just 34,000 this year, according to research firm IHS, if the price comes down significantly.

Hammered by their Korean competitors in the LCD TV market, Sony and Panasonic are seen as standing a better chance of competing in the next generation market by combining their technologies and development budgets.

Sony pioneered OLED sets, which boast sharper images and do not need backlighting, and sold the world’s first TV using the technology in 2007.

It halted production of the screens three years later amid the post-Lehman global downturn.