Canon Takes Over SED TV Joint Venture

Electronics maker Canon has announced it will buy out Toshiba's share of a joint venture to make flat-panel SED televisions.

Back in 2003, eletronics giants Canon and Toshiba went in on a joint venture to create SED Inc. to develope technology for SED flat panel televisions. SED TVs bear some slight similarities to CRT TVs, except that they have one electron emitter per pixel, rather than one big gun for the entire television screen. In October 2006, the companies announced plans to begin manfacturing SED televisions…and were slammed by a lawsuit earlier this month by Nano-Proprietary, Inc., which claimed the company needed to execute a new license for its technologies included in SED TVs. The rationale: although Canon had licensed Nano-Proprietary’s tech, that license couldn’t be transferred to SED Inc. because Toshiba holds decision-making power over the joint company.

Canon apparently has enough faith in the marketability of the SED technology that it has announced it will take over the joint venture, purchasing all of Toshiba’s shares of SED Inc. Effective January 29, 2007, SED Inc. will become a wholly-owned subsidiary of Canon and neatly sidestep Nano-Proprietary’s patent infringement claims.

Canon says it will re-assess future production of SED flat panels—including plans to build a $1.5 billion factory in Japan—but still plans to roll out the first SED sets to consumers in Japan during the fourth quarter of 2007. The current president of SED, Kazunori Fukuma, will resign from Toshiba and be hired by Canon to continue to serve as president; Toshiba engineers currently working at SED will stay on through at least the transition period while Canon ramps up the new business. Toshiba also plans to buy SED displays from Canon to be marketed under its own Toshiba brand.

The move is risky for Canon: although SED TVs hold some promise to deliver brighter images with less power than current LCD and plasma flat-screen displays, analysts have so far been dubious that the technology will be competitive in the television marketplace, especially with increased LCD TV production delivering ever-larger panels at ever-lowering prices.