Analysis: 3D could be mainstream in homes in two years

By Georgina Prodhan

LONDON (BestGrowthStock) – Watching television in three dimensions at home could become mainstream in as little as two years as prices for 3D TV sets drop and events like the soccer World Cup raise awareness of the technology.

Although many believe that consumers will never want to wear 3D glasses at home, and 3D TVs have only been on sale for a matter of months, a combination of factors points to faster adoption of 3D than of previous new technologies.

Unlike high-definition video or the VHS-Betamax battle before it, where deployment was held up for years while movie studios and electronics makers supporting rival formats battled for dominance, 3D presents no such prospect of a format war.

Consumers need not fear splashing out on the wrong equipment, as the HDMI cables that connect set-top boxes to televisions or other screens can detect and support many different standards.

Often, new technology finds itself in a chicken-and-egg conundrum in which consumers do not buy new equipment until content is available, while media companies are not motivated to produce content until consumers buy the equipment to consume it.

But TVs are already on sale from Samsung (005930.KS: ) that convert two-dimensional signals into 3D in real time, meaning that consumers can already start to enjoy images leaping out of the screen, even with little original 3D content yet available.

DSG (DSGI.L: ), Europe’s second-biggest electronics retailer, said TV sales rose 50 percent year on year in the run-up to the soccer World Cup currently nearing its finale in South Africa, with 3D creating a lot of buzz.

“It’s still at the early-adopter phase at the moment, but the way they have been buying and continue to buy leaves us extremely confident about 3D sales,” said a spokesman for DSG.

The technology is not yet perfect but could soon eliminate the need for equipment that studios use to upgrade 2D to 3D — made by the likes of India’s Prime Focus (PFO.L: ) — which many analysts consider potential choice investments.

Stu Lipoff, a fellow of the Institute of Electrical and Electronic Engineers — the world’s largest technical society — said: “It’s one of the most remarkable things I’ve seen in 30 years in engineering.”

“The processing power is comparable to what five years ago you’d only find on a supercomputer in a university lab,” he says of the technology, which is made by the likes of Texas Instruments (TXN.N: ), Broadcom (BRCM.O: ) and NXP.

EVERYONE’S INTERESTED

Samsung, which was first to market, is expected to sell the lion’s share of 3D TVs this year, but Sony (6758.T: ), Panasonic (6752.T: ) and LG Electronics (066570.KS: ) are not far behind.

Samsung and Sony may be in discussions about a 3D alliance, and Sony hopes 3D models will make up 10 percent of the more than 25 million LCD TVs is aims to sell in the next fiscal year.

Technology research firm ISuppli expects 4.2 million 3D TV sets to be sold this year, or about 2 percent of all LCD TVs, rising to 78 million in 2015.

Interest in 3D has grown fast, both among experts and the general public.

Public enthusiasm for 3D has been driven by the blockbuster movie “Avatar,” released at the end of 2009, which single-handedly raised awareness to 60 percent from 40 percent among U.S. consumers, according to TV analyst Stewart Clarke of research firm Informa.

Sports are also a fertile ground for 3D — French media firms see sport and porn driving 3D adoption — as the viewer feels the excitement of being placed in the middle of the action, instead of being a distant observer.

Walt Disney’s (DIS.N: ) sports broadcaster ESPN used the soccer World Cup to launch its first 3D channel, and ESPN’s president told Reuters this week the network had had “off the charts” success with its coverage.

And in Britain, satellite broadcaster BSkyB (BSY.L: ) and its major shareholder News Corp (NWSA.O: ) are making big bets on 3D. Sky plans to launch a 3D channel this year after whetting appetites with broadcasts in bars of Premier League soccer.

“It’s absolutely incredible. It’s fantastic. It’s the biggest development since black and white,” said Robert Kerr, a 27-year-old projects consultant, near London’s Westfield mall.

Asked whether he would buy a 3D TV, he said: “Personally, I’d always wait for the price to come down. When it comes down to about 1,200 pounds ($1,820), I wouldn’t hesitate. In 18 months, definitely.”

Currently, 3D TVs cost about one-and-a-half times as much as equivalent 2D high-definition sets, but prices are falling.

In Britain, the first Samsung 3D TVs went on sale in March for about 1,800 pounds, plus 150 pounds for two pairs of active-shutter 3D glasses, which pick up alternate images for the left and right eyes.

Already, prices for some models have fallen below 1,000 pounds for complete kits including glasses.

GLASSES CONUNDRUM

Typically, new consumer technology is considered to reach a take-off point when 20 percent of the population has it.

In the past, consumers have kept TV sets for an average of about 11 years, but far faster replacement cycles for other consumer electronics such as cellphones are changing attitudes.

Informa believes 3D TV will take off only after the need to wear glasses has been removed, which it forecasts will happen some time after 2015. But the IEEE’s Lipoff says it is not unreasonable to believe it could happen in two to four years.

LG has recently started offering 3D TV sets that can be viewed wearing so-called passive glasses that are far cheaper and lighter than battery-powered active-shutter glasses.

The televisions are more expensive because more of the work is done inside the set — a 47-inch TV costs $2,200 in the United States — but the glasses cost next to nothing.

Technology to view 3D without glasses does exist — chipmaker Intel (INTC.O: ) demonstrated a version at this year’s Consumer Electronics Show in Las Vegas — but is limited by only being viewable from certain angles.

As such, it is more likely to succeed on screens watched by a single viewer like computer and cellphone displays.

Sean McCarthy, a video and neurobiology expert at Motorola (MOT.N: ) said: “Not wearing glasses could be more constraining than wearing glasses.”

(Additional reporting by Ian Smith and Mark Potter, Editing by Sitaraman Shankar)

Analysis: 3D could be mainstream in homes in two years