You can learn a lot by piecing together the links in a supplier chain. More importantly, you can make a lot of money that way.
Last week, electronics giant Sony (NYSE: SNE ) said that rear-projection Bravia TV sets are going the way of the passenger pigeon. Sony's last plasma screen left the factory in 2005 as the company refocused on LCDs and its own 3LCD and SXRD rear-projection technologies. The new direction this time is toward LCD and organic light-emitting diode (OLED) screens.
It's hard to tell what this move means for Sony investors. After all, the company is simply refocusing its research and manufacturing resources in new places, and not really moving into or out of any particular markets. But cast a quick glance sideways and you start to see some ways to invest in this move after all.
Sony makes its own projection screens, but outsources the LCDs to a joint venture with fellow electronics mammoth Samsung. Bah, humbug -- another giant that won't move very far on the success or failure of a single product line. But when it comes to OLED technology, tiny Rule Breakers pick Universal Display (Nasdaq: PANL ) springs to mind.
It was a big deal for Universal when Sony released an 11-inch OLED screen in Japan earlier this month. Sure, it has limited production at only 2,000 units a month, and the company claims to lose money on every sale despite a steep $1,700 price tag. And to the best of my knowledge, there isn't even any Universal tech in that product.
But it was the starting shot for a new era in display technology, and when Sony relegates its pried projection products to front-projection uses in favor of OLED products, it's a drum full of sports drink to help the new entrant win this race. Sumitomo Electrical bought Universal's only comparable rival earlier this year, and Eastman Kodak (NYSE: EK ) is another big boy that won't feel the winds of change as strongly as Universal Display will.
Nokia (NYSE: NOK ) is already using Universal's patented technologies by way of Samsung-made screens in the new Prism handset. Kodak claims "over 15" unnamed licensees, and Cambridge-nee-Sumitomo has partners like Philips (NYSE: PHG ) and Hitachi (NYSE: HIT ) . This market will eventually be massive, and easily able to support a few competing providers and technologies.
And the race is on. Thanks, Sony, for the starting salvo.
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