Samsung and Sony set to discuss 3D TV deals

Just days after unveiling a Sony-branded internet TV with Google, Sony's chief executive is set to meet rival Samsung Electronics, for possible alliances, as the Japanese consumer electronics maker aims to turn its TV business profitable with aggressive sales targets.

Yesterday's closed-door meeting between Sony CEO Howard Stringer and Samsung's Lee Kun-hee, is the first since Lee returned as chairman of the South Korean technology powerhouse in March. Sony has described this as one of its regular and traditional discussions with flat-screen partner Samsung.

The meeting is widely seen by analysts as a move by Sony to address tight LCD supplies for TVs, but Samsung may also seek alliances with Sony to set up a common standard in 3D technology, the next big thing that many electronics firms are betting on.

"It's mainly aimed at Sony rebuilding and consolidating its relationship with Samsung because its strategy of diversifying panel suppliers to the likes of Sharp has failed to ensure smooth supplies," said Ricky Seo, an analyst at KB Investment and Securities.

"So, it's like Sony coming back for more cooperation as it needs Samsung to meet its aggressive promotion of TV business, especially to get advanced panels for 3D TV production."

Since returning to the helm of Samsung Group's crown jewel in March, Lee has unveiled a record $16 billion (Dh58.7bn) investment plan including $4.2bn in LCD and Samsung's first chip line construction in five years. Lee had stepped down nearly two years ago after being convicted for tax evasion but was later pardoned by the South Korean president.

Sony has had an LCD joint venture with the Korean firm since 2004. Last year it, however, announced a separate venture with Japan's Sharp with ¥68 billion (Dh2.7bn; $756m) investment plans to take a one third stake by next year. This reflected Sony's growing need to secure stable panel supplies to tap a booming flat-screen TV market set to growing 24 per cent this year to 180 million units, according to research firm DisplaySearch.

"Sony and Samsung could talk about setting up another LCD production line. But there is an outside chance they could be reviewing the strategic value of their panel ties," said Koichi Hariya, an analyst at Ichiyoshi Research Institute in Tokyo.