PANASONIC CATCHES THE 'VISION'
Look out, Sony -- here come truckloads of competition
by David J. Elrich
COLORADO SPRINGS, COLORADO, May 18, 1998 -- While companies like Zenith, Mitsubishi and Hitachi cough blood in the battlefield known as the consumer electronics business, several firms are emerging from the smoke as winners. Sony -- the company everyone loves to hate (just like Microsoft) -- and now Panasonic appear to be among the victors. That was E/Town's take following the company's new product introduction and sales meeting.
Sales meetings are usually upbeat and rah-rah (even Zenith's) but Panasonic actually had some numbers, in the black, to back up the overall sense of optimism. The company sold $3 billion worth of CE gear in the year ending March 31, the most ever, and expects an increase of 5 percent this year thanks to growing sales of DVD players, among other gadgets. (This doesn't count parent-company Matsushita's sales of parts to other U.S. manufacturers, particularly PC firms.) Don Iwatani, president and COO, Panasonic Consumer Electronics Company, said Panasonic had 40 percent market share of DVD players sold in April, double its usual 20 percent. This was thanks in part to the A110, the $399 player that's gotten rave reviews among E/Town's DVD devotees (we'll get more into DVD a bit later on).
DVD players aren't the only digital products the company is hoping will enhance its growth -- digital television is another area of great expectations. Panasonic now sells tons of broadcasting equipment to the three major networks, actually making inroads against archrival Sony. It plans to use this expertise in consumer gear (that's where you come in).
The company unveiled a single-chip set-top box to convert high-definition signals for digital-compatible TVs. It's $1699, not the hoped-for $150 envisioned by industry pundits a few years ago. But at least it exists, a rare commodity in this ridiculously hyped Digital Age. Of course, you can expect prices to drop in a few years as production ramps up. Also new are a series of digital TVs plus the first HD-capable D-VHS VCR (under $1000).
Panasonic and its sister/brother companies Technics and Quasar offer truckloads of "stuff" -- SKUs as they're called in the trade -- so let's get to 'em.
DVD players
Panasonic has eight now, including the A105, A110, A310, K510 plus the L10, the way cool portable with a five-inch 16:9 screen for $1299. Coming soon is the X410, a DVD player with the "Divx feature," as Panasonic execs refer to it. The machine is due in August/September. Other than pointing it out, they offered no further details or pricing or features. If you described it as a "skunk at the garden party" you'd be pretty close to the mark. These boys and girls see this machine as one player out of eight [and, no doubt, a sop to Circuit City's retailing and arm-twisting power -- Ed.]. Don't expect to see "Divx made possible by Panasonic" as a major advertising theme this year -- or any other.
Of more interest to my wandering eye was a copper-finished DVD player dubbed the DVD-H1000. Panasonic is preparing this baby for the ultra high-end DVD market. No details were given for competitive reasons although it's due in late '98. However, it's targeted for front projection systems so most likely it has progressive scan out, computer-based controls, etc. While it was not presented as a Sony killer -- in other words, competition for the reference DVP-S7000 -- it has all the earmarks. We'll keep a close eye on this one. Also new was a DVD portable like the L10, but the DVD-P10 PalmTheater doesn't have a screen ($699).
As for overall DVD player sales, Panasonic believes the various companies involved in the format will sell 800,000 to 1 million units to dealers in '98. Remember this is not the number purchased by consumers. Still, it's pretty hefty.
To push multichannel DVD sound, Technics has a very affordable DD/DTS decoder due July for $299 (SH-AC500D). One of the more interesting packages is a bundle of the decoder and the SA-AX6 receiver for $599 -- a steal in anyone's book. When asked about the arrival of the mythical DTS-encoded DVDs, the Panasonic people referred all questions to DTS spokespeople who weren't anywhere near Colorado Springs. As we've noted before, Richard Wagner wrote a great opera about a mythical ship that appears out of the mists every century or so (The Flying Dutchman, in case you were wondering). Perhaps Philip Glass -- or how about Alan Parsons? -- would like to write an opera or tone poem about the poor owners of DTS-enabled DVD players waiting longingly by the shore, pining for the lost DTS-encoded DVDs! As always E/Town offers the folks at Image Entertainment or DTS the opportunity to give their views -- you know how to reach us.
Also new were DVD-ROM drives, DVD-RAM drives, a prototype of a DVD recorder (due in about two years) and a mockup of a possible DVD camcorder (no ETA on this one whatsoever). FYI -- Panasonic's parent Matsushita Electric is one of the world's largest suppliers of computer CD-ROM drives. That's why it's making a huge DVD push. "It's the future, baby" as Austin Powers would say.
Digital TV
Like everyone else, the Panasonic folks are looking for HDTV to jump start the television biz. They had several 1080i (interlaced) compatible TVs with widescreen 16:9 and conventional 4:3 aspect ratios. They showed displays of 480p (progressive) on a new 4:3 32-inch digital-compatible SuperFlat set that was outstanding. This was a picture to die for ... one of the best images I've seen. The CT-32XF55 will cost $1799 and it's due this fall but there's a little $1699 catch.
To see HDTV in any of its permutations, you'll need to spend the bread. This fall you can buy a 56-inch widescreen Panasonic 16:9 projection TV for $5999. It displays 1080i, 480p and 480i. You'll need the TU-DST50 tuner ($1699) to see the pretty pictures, so for $7698 you're home free. I'm sure some retailers will offer package deals for $7499 or less if you pay cash!
The PT-56WXF90 also has a built-in progressive scan converter to enhance NTSC pictures, component video inputs (for the converter box), auto digital convergence, 3D Y/C comb filter and two-tuner PIP. One cool thing about loading a TV with gobs of digital circuitry is that it can perform new tricks. The Catch Up mode stores a series of video stills -- if you have to run out of the room while a game is on, hit Catch Up when you return and check out the stills. Actually, you'd be better off just hitting Record on the PV-HD1000 HD VCR (also due this fall) but that will cost another grand. This deck records all 18 ATSC formats on S-VHS or D-VHS tapes. It's also backward-compatible with VHS. It uses IEEE 1394 as a dual direction interface between the decoder and the deck.
Panasonic has a number of bridge TVs, so if 6K is a bit much you can opt for the CT-36DV60, a 36-inch DTV compatible set for $3199. It's multiscan so it handles downconverted 1080i, 480p and 480i at 800 x 600 resolution. In the PC mode, it displays VGA, VGA text and MAC2.
Also on view was a 42-inch plasma TV now sold in Japan. It weighs 100 pounds and is four inches thick; '99 is the scheduled arrival for the wall-hanging TV. The 50-inch prototype (no plans) weighs 130 pounds and is also four inches thick. We're getting there, folks, but it's still "next year."
More goodies
Panasonic is making a major push into digital still photography. The new million-pixel PV-DC1580 ($599) looks like a winner; it uses removable memory cards that hold up to 40 1024 x 768 images (8 meg card; 30 is the maximum available). It has an optical viewfinder, built-in flash and 2-inch LCD screen.
Also on display were the new GigaRange 2.4 gigaHertz phones covered by E/Town's Stewart Wolpin last week. Along with the three 7700-foot range phones, there were 22 new ones in almost every flavor you can think of. This new system is great news for consumers since it will drive down prices for 900 MHz analog, digital and digital spread spectrum phones. And you know how we love trends like that.
Although Panasonic is building bridges to the digital future (the theme of the sales meeting), it also has its feet firmly planted in analog camcorders and VCRs (no real news hear since CES -- just falling prices). The company plans to introduce a new DV camcorder later this year. Prices are also falling like a rock here to well under $2000 from 4K in October '95.
The resurgent company is making a major effort with Gen X and Y consumers, sponsoring in-line skating tours and other edgy X/Y type activities. When its starts offering free body piercing, I'll know Panasonic has gone over the edge! The emphasis here was on the Shock Wave portable CD and cassette players. There's now a joggable portable CD player and others with 40-second anti-skip memory, along with a car CD head unit with anti-skip.
The Panasonic people gave us a taste of future technology when with "Krakken: Adventure of Future Ocean," a computer-generated 3-D animation that was quite good. They're working on a way to let us see 3D without glasses, another Holy Grail of the CE biz, just like the wall-hanging TV. Good luck!
At a press conference attended by a small army of Panasonic execs, they exuded a very positive view for the most part but they weren't happy with Technics' market share and were planning to push it heavily. They also tweaked their "good competitor" Sony, stating they had registered 5580 worldwide patents last year, twice as many as their archrival.
The press also met with 86-year-old Masaharu Matsushita and his wife. The chairman of the $60 billion global giant looked in great shape and joked -- as always -- about his golf game.
David's soapbox
Let me tell you: It was such a welcome change of pace to visit a major CE company and not hear a litany of bad news (sales are down, we're doing layoffs, closing factories, preparing our resumes, slitting our wrists). What's occurring in today's CE industry is elemental. It's pure Darwinian capitalism that's played itself out over the past 40 years. The bigger, smarter companies are winning the almost half-century struggle to dominate the industry. Panasonic, powered by R&D, factories and good stuff, is grinding down the competition. Zenith is almost dead (the body's been cold for 10 years), Mitsubishi has cut back, Hitachi is pulling back, Thomson and its RCA brand are trying to emerge from decades of turmoil (the dogs are still cute, though). Until recently, only Sony had a clue regarding the vision of the industry in the 21st century. Many people dislike the company's Attilla-the-Hun, take-no-prisoners style but you can't argue with success. Now Panasonic has caught the vision and is executing better than ever. Not bad for a company started in the States by Ray Gates (no relation to Bill) and three other employees in 1959. [Parent Matsushita has its own illustrious history. -- Ed.]
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