Struggling Japanese electronics giants Sony and Panasonic said they would team up to develop televisions with advanced technology, in a bid to claw back market share from overseas rivals.
Despite a long-standing rivalry, the firms said they would aim to establish mass-production technology for organic light-emitting diode (OLED) television panels next year, as they try to recover from multi-billion-dollar losses.
The technology lets producers make TVs that consume less power while offering a sharper picture than conventional flat panels, and is expected to be one of the dominant technologies in next-generation televisions.
However, the industry has struggled to find an economical way to develop larger screens equipped with the technology.
The partnership marks the first time the two firms have teamed up in a core business, a major turning point for Japan's hard-hit electronics industry.
"Each company plans to utilise its own strengths to develop and commercialise its own competitive, high-performance, next-generation OLED televisions and large-sized displays," the firms said in a joint statement.
The move comes as South Korean rivals Samsung Electronics and LG Electronics reportedly plan to separately release 55-inch televisions with the advanced OLED technology this year.
But Mitsushige Akino, analyst at Ichiyoshi Investment Management in Tokyo, cast doubt on the Sony-Panasonic deal, saying it is too late.
"They should have done such a deal five or six years ago," he told AFP.
"The two companies need more drastic measures such as a withdrawal from the TV business altogether. This won't change their severe business circumstances."
In a research note, Fitch Ratings analyst Alvin Lim said similar tie-ups may be in the offing for Japan's electronics giants, but he added that South Korean firms were "way ahead" in developing OLED technology.
"Such tie-ups between fierce competitors in the TV segment were once unthinkable, (but) they are now necessary to claw back the technological and market leadership ceded to Korean manufacturers," said Lim, associate director in Fitch's telecommunications, media and technology team.
But he added that "Japanese OLED investment is better late than never".
"While consumer demand for OLED is still unproven, without investment Japanese manufacturers could become stranded in the TV market should this technology become mainstream." - AFP/Relaxnews