So I understand that yesterday, Sony (NYSE: SNE ) announced it is stenciling the "R.I.P." onto the gravestone atop its rear-projection TV business. Um, wasn't it just a couple months ago that Sony also announced -- much to Kodak (NYSE: EK ) and Universal Display (Nasdaq: PANL ) investors' delight -- that it was leading the charge into OLED televisions?
Technophiles, forgive me, but I'm beginning to wish Intel co-founder Gordon Moore had never been born -- or at least had refrained from codifying the pace of technological progress into a "law" of econo-physics. Because to be quite honest, all this progress is starting to make my heads spin.
Yes, both of them
As I watch this story play out, you see, I'm thinking with two heads. As a consumer, the choices are coming just a bit too fast and furious for my taste. It seems to me that as soon as the industry invents one new-and-improved teleview-ing experience, it becomes obsolete in favor of the next. Vacuum-tube and CRT sets have been around in the U.S. since before 1940, right? If they're essentially obsolete today, that means the technology had about a 70-year lifespan. Rear projection technology (R.I.P. yesterday) got about 35 years.
The last set I personally paid U.S. currency to acquire was a newfangled technology called "flat screen." I bought in fairly early on the adoption curve there, five years ago -- and it's already been replaced by DLP, plasma, and LCD technology. And now OLED.
Paralysis
As an investor, I worry that we're fast approaching a situation where the time between the introduction of one technology, its obsolescence, and its replacement will be too short to permit a consumer to "buy in" to one concept before getting distracted by the next. Seems to me this is a recipe for consumer paralysis -- a state in which buyers' wallets are frozen in their pockets, with their owners afraid to buy a soon-to-be-obsolete product. If things keep going the way they're heading, I fear we could see Best Buy and Circuit City struggle to sell their wares even to early adopters -- much less the general buying public.
If that comes to pass, TV manufacturers like Sony, Sharp, and Philips (NYSE: PHG ) could have a hard time achieving the mass consumer acceptance of a technology necessary to reach economies of scale in production. They might even have trouble recovering the cost of their investment in developing the new technologies in the first place.
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