{"text":[[{"start":6.58,"text":"When Sony announced last month that it intended to pass control of its home entertainment division, including the Bravia television brand, to the Chinese group TCL Electronics, it came as a shock. How could Sony, famed for its sleek, expensive devices, play second fiddle to a Chinese brand?"}],[{"start":29.020000000000003,"text":"The question can be asked the other way round: when did TCL, which was founded 45 years ago as an audio tape manufacturer in Guangdong province, turn into a credible joint venture partner for Sony? Along with Hisense, it has established a pretty good reputation for making budget LCD televisions, but Bravia’s high-end halo has been in place for two decades."}],[{"start":55.17,"text":"The answer lies in the longevity of reputations. It takes time to build brands and perception often outlives business reality. Sony still produces high-quality televisions, but it no longer makes key parts itself. It was long ago overtaken in sales by South Korea’s Samsung and LG, and now has only 2 per cent of the global market."}],[{"start":80.85,"text":"The television industry is a lens to view what has happened to global manufacturing. First, Sony and other Japanese brands took the lead from US companies led by RCA in the 1980s, then the lead passed to South Korea. The planned Sony-TCL joint venture coincides with another turning point: TCL is now close to overtaking Samsung as the world’s largest maker."}],[{"start":106.28999999999999,"text":"The striking thing about Sony’s plan to put its television and home audio brands into a joint venture in which TCL would hold a 51 per cent stake is that it had little choice but to adapt. Technological change and the sheer scale of Chinese manufacturing have changed the world: a television of the same quality as in Sony’s heyday would cost a fraction of the price now."}],[{"start":132.44,"text":"Sony still has valuable intellectual property, including expertise in rendering images. But televisions are not like iPhones: it is hard to maintain leadership of the industry without producing the components that go into them, notably their flat panel screens. Those are mostly now made by Chinese companies including TCL Technology, which is part of the group."}],[{"start":156.13,"text":"“Historically, the company that makes the panels ends up being the industry leader,” says Robert O’Brien, display research director of Counterpoint Research. Television history is being made again: Chinese makers supplied 71 per cent of television panels made in Asia last year, according to TCL. Less than 10 per cent of them are now made in Japan and Korea."}],[{"start":182.35999999999999,"text":"This puts TCL in a similar spot to Samsung two decades ago: a company known for making components for others, which climbed the value chain and created its own consumer brand. TCL has been spending heavily on marketing to elevate its own image, mounting a grand display at last month’s CES trade show in Las Vegas and sponsoring the Winter Olympics."}],[{"start":206.5,"text":"TCL is betting that size matters, using its capacity in flat panel production to produce a 98-inch home theatre television that retails for $10,000. It has also invested in technology, making steady improvements to its LCD screens. The Mini-LED technology it launched in 2018 is close to challenging the high-end OLED televisions on which Sony and LG have focused."}],[{"start":234.4,"text":"But Sony’s halo still glows. It is very difficult to build a brand and the joint venture offers a shortcut. Even if a Bravia television were wholly made by TCL — as Sony’s OLED screens are supplied by Samsung and LG — it would feel different. The brand resonates, although some of its substance is historic."}],[{"start":257.23,"text":"This moment has been a long time coming for Sony. It stopped making its own LCD screens in 2011, and has been shifting its consumer electronics division away from selling televisions and smartphones. It sees a more profitable future in premium cameras and audio, and higher margins in selling to professional users rather than competing in the mass market."}],[{"start":282.18,"text":"That partly reflects harsh reality: Sony’s former strength in consumer electronics has eroded as South Korean and Chinese hardware makers have grown, leaving PlayStation as its strongest device. But there is also a strategy there. It has diversified into film, television, music and games, where intellectual property is less in danger of being beaten by China’s scale."}],[{"start":308.28000000000003,"text":"The big story in television, as in other manufacturing industries, is the rise of China. Sony has conceded it and Samsung faces a fight not to go the same way in future. TCL’s brand does not yet match its size, and it still needs Bravia to add a halo. One day, China’s television champion will have its own."}],[{"start":340.70000000000005,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1770623527_4174.mp3"}