April 6, 2007 4:00 AM PDT

Not your sports bar's rear-projection TV

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An unorthodox start-up is betting that consumers want to pay less money for big televisions, even if they're not flat panels.

MicroDisplay, a Fremont, Calif.-based company, will begin manufacturing a 56-inch liquid crystal on silicon (LCOS) television this summer that will sell a few months later for between $1,300 and $1,500.

A type of so-called microdisplay technology, LCOS is a silicon chip covered in liquid crystals. Light is reflected off the chip and through a projector to produce an image on a TV screen. MicroDisplay plans to use its own proprietary liquid crystal-covered chip, which it has dubbed "Liquid Fidelity," in rear-projection televisions that it will sell to mass-market brands, such as Akai and Memorex.

MicroDisplay sets

MicroDisplay's chip was developed by researchers from the Massachusetts Institute of Technology in the late 1990s with the original intent of selling the technology to the military for use in virtual-reality goggles. When virtual reality didn't pan out, the company decided in 2001 to tackle the television business.

Some may find the company's entrance into the rear-projection TV industry a belated and curious choice. The hottest TV sector is high-definition flat-panel displays: 17.2 million flat panels shipped to North American retailers in 2006, representing a 136 percent jump over the prior year. Shipments of projection TVs in North America, on the other hand, peaked last year at 2.4 million units and are expected to decline to 1.9 million units in 2007, according to DisplaySearch.

So why now and why this industry? MicroDisplay executives say they are keenly aware of the limitations of entering a mature market, but equally confident because of a couple of factors. They've garnered three rounds of venture capital funding, and although they won't disclose how much, will say they are looking for $20 million to $30 million more in the next round to ramp up production. They're betting that their proprietary LCOS chip, the surprising svelte look of their TVs, the cost effectiveness of their 45-employee company, and the practice of buying components in China and assembling the TVs in Mexico will allow them to beat the established brands' pricing.

It's a challenging market to begin with. "The overall market of rear-projection TVs is kind of under assault from flat panels, plasma and LCD, as the sizes of the flat panels have increased and prices have dropped," said Paul Semenza, vice president of display research at iSuppli. "The main advantage in some ways of RPTV (rear-projection TV) is it's cheaper to get to a larger-size TV set. But what's been happening is, as these new flat panel factories have come online, flat panels have gotten cheaper too."

But by selling a 56-inch set for about $1,500 beginning in the third quarter, MicroDisplay's prices would beat the average price of a similar-size LCD ($5,496) or plasma ($3,298) by a long shot.

MicroDisplay execs believe that no matter how inexpensive flat panels become, rear-projection sets will "forever" be cheaper. "We know what we're getting ourselves into," said Marty Zanfino, MicroDisplay's vice president of marketing.

What they're getting themselves into is a situation dependent entirely on numbers, not glossy brand names or fashion statements. Since they will be selling to mass-market brands, MicroDisplay's goals are quite modest: Zanfino said the company is looking to gain a "high single-digit" share of the LCOS market, a sector projected to produce $1 billion in sales this year.

"If they execute it right, if technologically they're able to do what they say, there's a small, legitimate market for 55 (inches) and above," said Edward Taylor, vice president of TV market research for DisplaySearch. Though, he added, he doesn't see MicroDisplay ever being larger than a $100 million-a-year company.

CONTINUED: Chasing Vizio's success…
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11 comments

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An't that much cheaper than DLP
I think 1500 for 55" rear projection an't much cheaper than some
established brand's rear projection. They need to do something as
drastic as Vizio, i think that is the brand.
Posted by hunter_jc (109 comments )
Reply Link Flag
This is a *1080p* TV, mate
I think you'll find the $1500 price for DLP only applies to lower resolution 720p sets. Samsung's 1080p DLP is around $2400.

Also, logically these types of TVs are always going to be less expensive than flat panels: With flat, when you build a bigger screen you've also got to build more of the most expensive parts of the TV (glass panel, plasma cells, LCD doohickeys) that run the screen. Projection screens are mostly air--to build a bigger-screened projection TV, you just need a bright light source, a bigger mirror, and a bit more plastic to hold it all in place. Bigger, lighter, less energy wasted--my money's on projection.

Anyway, hard to diss MicroDisplay when their TVs aren't even in stores yet, so we can't really compare them to anything else. Proof is on the show floor.
Posted by imtheben (4 comments )
Link Flag
Ain't
interested in expensive TVs
Posted by paulsecic (298 comments )
Link Flag
Sony and JVC have sold LCOS for years
Sony's SXRD and JVC's HD-ILA technologies are 1080p LCOS systems.

Sony's 55" 1080p SXRD set run between $2,000 and $2,500 street price.

Samsung's 56" 1080p DLP set runs between $1,600 and $2,000 street price.

The effect of the MicroDisplay product will be to reduce prices of LCOS and DLP sets.

Sony and Samsung will be able to maintain a premium, the question is how much.

I would rather see someone come in with technology to drive a 30"-40" HDTV into the $500 range.
Posted by meh130 (145 comments )
Reply Link Flag
I've heard it before...
15 years ago a CRT engineer friend told me that CRT will always be cheaper and with better picture quality than any LCD displays... Well, just look around.
Posted by winstein (460 comments )
Reply Link Flag
He was correct.
And still is however most people don't really care.

I went to purchase my first big screen HDTV about a year ago. Was dead set on a Sony Vega until I visited the store where I was going to make the purchase. Sitting next to the Vega, with the same image showing, was a Toshiba CRT unit.

The picture quality wasn't even close.

I left with the CRT Toshiba and an extra 900 bucks in my pocket. I still don't regret it today even though the plasma and LCD market has made noticeable improvements.
Posted by rkadowns (18 comments )
Link Flag
I concur
He was correct. It makes me sad to see people (and companies) wasting their money and time buying and making LCDs and such when their old CRT has such a nicer, warmer, richer, realer picture. That's why I said in my previous comment that I might not laugh at people who spent thousands on a SED set, because it's supposed to be the same technology as CRT, just in a flat screen, with electron emitters on every pixel instead of in a "huge" gun that sweeps the screen. We'll see, though.
Posted by adot44 (19 comments )
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