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Either way, we can go to market much more quickly to productize newer versions of TVs. If the feature is the same, it (the change) would be invisible to the consumer. If it's a really radical new change, we can create new models on the fly.
And our strength with our channel partners is that they understand our capability. Now they can get into the flow and say "Look, we need more resets" so they can take advantage of things that come along.
It sounds like you take a very modular approach to TVs.
Woo: Yeah. It becomes a lot more like IT. When we started this three years ago, the CE market saw two resets, maybe one to two resets per year. There were annual products and there were very, very long lead times. Everybody knew it had to change and become more IT-like, but we executed it.
What's the average reset or refresh rate now?
Woo: Actually a lot of the retailers, they have almost continuous resets. They don't want to miss the opportunity. For some of the mass merchants, it's a little harder. They are managing something like 30,000 SKUs, but the traditional electronics retailers, they're all adjusting and the issue for them is which manufacturers are giving them something to adjust to.
Some of our traditional competitors, the established brands, they're still on the one product a year cycle. We can introduce new models as we see market demand or market requirements change.
Has LCD won?
Woo: I think most people have concluded that the march toward LCD is continuing and is probably unstoppable. In the near future, there's really no replacement technology. Think about the number of displays on the TV side, in monitors and notebooks, even the digital photo frames: the amount of glass required to service the global market for everything is considerable. LCD is the only technology with the infrastructure capable to support demand.
But why is LCD winning in TVs?
Woo: The LCD industry does not just service television. The industry is not new or niche-y. LCD is a core display technology used in the PC world for notebooks and computer monitors and many other applications. (TVs are) simply extending it into another area. Television was really a matter of finding the right size and performance features with an existing technology base in order to capture a new market.
What else do you use plasma or even DLP rear projectors for? They are single-application types of products. People think, "Oh, LCD is new." Well, LCD TVs are new, but LCD is mature and that makes it much easier to scale up.
The plasma guys have a different challenge. The actual production capacity is not growing. Even if it was the most popular format, it could not meet supply.
But Samsung is building a plasma factory, and execs at Samsung and Philips, which sell both kinds, will tell you that quality is equal between LCD and plasma.
Woo: For every single plasma plant that's being constructed, there are probably 10 LCD plants being constructed. So, after a certain point, it will overwhelm the marketplace. Will LCD be 100 percent of the market? No. There's no technology in any field that's 100 percent of anything. Is it a dominant format for the foreseeable future? Probably.
And there are a lot of markets to address. Westinghouse Digital launched in China in October and in Japan in December.
How did the Japanese launch go? There's sometimes a 'buy local' ethos there. Microsoft has never done well with Xbox.
Woo: We're in the largest retailer in Japan and we're in Go Mei, which is the largest retailer in China. If you look at our pattern, we reached out to the largest partner in the U.S.--Best Buy--and established a pretty good relationship with them, which helped drive the category. In China, we're in a very similar position. We feel like we're starting at the right time. Japan is a little different; it's a mature market. We have a very good brand in Japan. Westinghouse has been in the news a lot with Toshiba's acquisition of Westinghouse's nuclear group.